I think this comes down to the old socialism vs capitalism debate. Industries gain a lot at relying on 'free products' that are most of the time financed by states (think roads, infrastructure, etc...), but you can find counter examples where privately owned & sold products work better.

Concerning software, I agree the situation is a bit different as states are hardly strong players there. But I would disagree on the fact that the 'clut of free' is a sin. The whole industry gained a lot in terms of openness, sharing of best-practices and just innovation. Try finding how to build a washing-machine from scratch or just getting the PCB layout of your radio, it's a really painful process.

But I would agree that I'm worried too on the future of software, but I would rather push for more financing of open source (& free) projects - by states or NGOs - rather than pushing the whole industry to go sales first.