Linux is a rather different deal than Wikipedia. When you see Linus running fundraisers for 3-4 months until ten or twenty million dollars is donated, then I will probably think that Linus and Linux need to become more self-sufficient.
The content and the hosting can be separated, as they are with Linux and many other open-source projects; Linus controls Linux, but that doesn't necessarily mean that he also controls kernel.org or any of the other places where it may appear. The authors of projects on Google Code control their projects even though Google provides the hosting -- individuals can still create content without centralized authority. If Wikipedia performed more experiments in this space, they may not need $20 million every year to continue operation.
That's a pretty hefty investment for something that doesn't make any money. Even non-profit or public endeavors are expected to operate in a generally self-sustaining way so that they don't become a burden and so that reasonable control isn't taken away from the endeavor's controllers.
Wikipedia could be developed independently of the Wikimedia Foundation. I don't think Wales et al have done a really spectacular job running things as it stands anyway.
The content is produced by the community. This fundraiser is not to pay people to produce content, but to pay for hosting and other costs associated with running a live instance of the Wikipedia content.