> A publicly-traded company is likely not the appropriate structure if you want to create free software.

Fixed. Non-public companies can sometimes be an appropriate structure. E.g. the Mozilla Corporation: as a for-profit entity it can do a lot of things that the non-profit Mozilla Foundation can't, but it's 100% owned and completely controlled by the Foundation, and reinvests all profits back into the Mozilla project.

I think the opposite argument can be made -- Red Hat makes this business model work, and they're doing pretty well.

Also, if in the future open source becomes the norm, not the exception, then this will become moot -- the fact that a company is based on open-source will be considered typical, not an outlier.