As an author, I've sold legally-protected "intellectual property" (two book manuscripts) for income, and it has ticked me off that my work has been pirated and made available on the web (though I'm not sure it's had a negative effect on sales). I respect other's right to determine how their creations are used, and I don't pirate software or movies (though I have taken advantage of the Canadian private copying regime for music). That said, I do believe that open source is an incredibly powerful concept, and that (almost) all software should be distributed that way.
It's widely held that "security by obscurity" is not security at all, and that real security comes through good design, precise customization, diligent implementation, and ongoing maintenance (services).
I'd argue the same with software: "income by obscurity" -- selling code -- is absurd, especially when bits can be copied for $almostNothing. The real value in this industry comes from good design, precise customization, diligent implementation, and ongoing maintenance (services).
Ours is a service industry, and we need to stop pretending that it's a product industry.