Yeager said he didn't know that Bosack had recently incorporated Cisco and asked Stanford for permission to sell the Blue Box commercially. He had been denied." [1]
Their whole business was built on this "borrowing" principle, but eventually some of it fired back [2] on the "original" gang, when they went "public" (Sequoia, hated by Lerner).
In essence, the following quote sums it all up: ``The fundamental problem is: how do you negotiate an equitable agreement with crooks?''
[1] http://pdp10.nocrew.org/docs/cisco.html
[2] http://www.pbs.org/opb/nerds2.0.1/serving_suits/cisco.html
"I fear the Cisco experience has done unseen damage to Stanford in the form of creating inhibitions against sharing ideas, information and developments with possible commercial value among our groups which have need to benefit from each other's work"
* Some companies will be fearful, because they don't understand, and, as you say, will indiscriminately avoid all open source software.
* Other companies will take the time and effort to understand what GPL, BSD, the Apache license, and the like mean and require of them, and as a consequence will be able to take advantage of open source software where it is appropriate. This will be a competitive advantage for them.