A premise here that doesn't stick, "users are expecting open source and free software" this is definitely dependent on the type of software, and reddit isn't even the best way to demonstrate this reddit frowns at everything anyways. There are definitely still a lot of new startups making revenue it's just harder these days.
One a much larger time scale, I think that premise still holds.
Greybeards used to tell me how back in the 80s/90s "everyone" (in software) was developing & selling their custom solutions. And it was completely normal to buy your software, the OS, IDE, compilers, Browser, basically everything. But with the proliferation of free software/open source many software business models had to compete with viable free alternatives.
And with big tech doing price-dumping in many markets (who still buys a browser?).
So nowadays many software sub segments there exist very good solutions that are free, competing with those are super hard and only possible for very specialized niches.