Most people working on OSS are paid by companies that rely heavily on closed source innovation in other areas of business.

They are commoditizing their compliments.

Even if that claim about "most people" was true, the point is still valid - OSS contributors _are_ "innovating" (creating new things to make money on), despite the innovations being freely copied. In part, the innovation happens _because_ or _with_help_ of free copying. Free sharing of some ideas/knowledge can be benefitial to innovation.

Nobody is claiming _all_ ideas business finds / works on should be immediately shared freely with the world. The benefactors of a business are naturally motivated to protect their know-how. But it should be the business' responsibility to protect its secrets, not HN commenters or governments'. If an idea can't be kept secret, then government issues patents, which should be time limited and regional.

I hear most OSS contributions come from people who make a living working at proprietary software companies...

the state of OSS hardware is pretty sad.

As is the state of OSS medicine.

Open-source software is great but it's generally more derivative than innovative (there are exceptions of course).

Innovation is a techno/bureau -cratic buzzword, which (noun) roughly means "new thing that is novel and can be used to boost the economy". A derivative of an old product can be an innovation, if you can still make or attract money on it.