That world existed and we all lived through it. Hobbyists really hated paying for software, as did academics. Fair number of people being paid to write code as there was nothing commercial that didn’t require customization. Or, smaller sites did it with a few programmers rather than renting software. No web though, nor phones so it’s not a fair comparison to today. But there were really skilled hackers doing open software in the 60’s.
Not at all clear.
FOSS before that likely made it fall as well
Almost certainly false. Imagine a world where the concept of open source never happened, so if you want a website you have to pay thousands of dollars for web servers, compilers, databases, etc. Would the demand for software developers be higher or lower than in our world?