> And then it still needs a centralized way to monetize the development work.
I disagree: once you put money into the equation, the quality of packages will go down as programmers try to shake as much money out of the users. Compare programs like MATLAB vs GNU Octave or Photoshop vs GIMP for example.
> And to get all that, you need a ton of paying users, not a bunch of freeloading tinkerers.
Do you really? I mean you are basically saying that the only way linux can compete is if it sacrifices most of what makes it good in the first place. I really doubt that users think "hmm today i'm going to pay for a bunch of crappy apps that each do some trivial thing for me while uploading my data to the cloud, then watch some ads, and then wade through a bunch of graphical menus to disable this one stupid feature I don't like, i love using iWinux this is so much better than other OS's".