I think the term "more open" is a bit too vague in this discussion. Sometimes people use it to refer to permissiveness (e.g. BSD) and sometimes people use it to refer to stimulating further open source work (e.g. GPL).
(And if we're following the "definitions" then ElasticSearch is no longer "open source" since that has a strict definition, but it's probably not so relevant in this discussion.)
I also don't really object to their license choice at all; what I object to is how they're framing the discussion. This license change is all about business: They want to be able to sell their cloud service without competition. That's perfectly okay, but there's no need to hide this. And certainly no need to "shame" Amazon for building a business on top of something Elastic open sourced.
> Have I misunderstood and their new license somehow reduces the openness of their source code to the world?
I think their new license just shows that it's all about business. If they really wanted an open source license which stimulates anyone to share improvements to ElasticSearch they could have picked GPL. As of now, any big company (Facebook, Google, etc) can create an improved internal fork of ElasticSearch which none of the community will ever be able to take advantage of. And why are they fine with Facebook/Google doing this? Because it won't jeopardize Elastic's cloud offering.
In addition, their new license also makes it harder for other people to build businesses on top of ElasticSearch. Imagine that I invest a ton of time and effort into creating a new management layer which is capable of scaling ElasticSearch drastically better. Something completely novel which looks at current trends of traffic and automatically moves shards around. Non-trivial stuff. Well, sorry, there's no way of building a business on top of this idea.