You remind me of Cory Doctorow's "The Coming War on General Computation" keynote, which interestingly didn't notice that streaming and similar cloud-based services would become the DRM of the last decade.
Or, as it turns out, the rising appeal of non-general purpose devices that are more efficient.
This is wrong, and every open-source project including OpenBSD and Linux, emacs and vim is counter-evidence.
"A lot of "software innovation" is not about building better software, but building software you can charge for" -- this is correct.
I maintain an open source project that sits in a very small niche. Based on downloads, stars on GitHub, and comments on forums, I estimate that hundreds or thousands of people find it useful. I do get the occasional donation, but if I calculated dollars per hour that I have put into this project, it would probably be in the single digits.
In much the same way that a company can produce an open-source product and charge for support, feature development, consulting, data feeds and sometimes SAAS operation.
If that were the case no software would be written except by hobbyists as a kind of joke. Software provides value other than being scarce and it's really the maintenance of the software that people are wanting (those paying attention at least) not the software itself.
Worthless to whom? Maybe for corporations who want to make billions by exploiting a legal monopoly. For the rest of humanity, abundant software is extremely valuable.
Note that profit-driven entities can give away software, but only if it supports another artificially scarce good. Google rents space on its search tool, as Facebook rents space on its social media tool. Ad space is scarce, and made more valuable the more Google and Facebook give away (which is proportional to the attention they capture).
But devs generally don't like artificial scarcity, so the platforms need a path in for them. I think Apple demonstrates this most clearly: the iPad and iPhone are software consumption devices, but the Mac is also a software creation device, and therefore is generally more open, free, and changeable.