Especially after the NSA scandal, we should really demand open source firmware from hardware manufacturers with every chance we get.
While this is arguably true for most hardware, GPUs are different from mundane hardware like ethernet adapters. The driver source code will reveal secrets about the hardware architecture, and the architecture changes in every generation. The advantage is not in the software itself, it is not showing the cards you are playing with.
In theory, it would be possible to give out the source code to the video drivers but it would not make sense to give out the source for chips in development. At best, you could get source code dumps after a new chip has rolled out. This is not really open source.
Yes, I want quality open source video drivers but on the other hand I want bleeding edge hardware and competition that drives hardware development.
Disclaimer: I write GPU drivers for living and I'm an open source enthusiast.
This will allow them to play nice with the kernel, support previous products while taking bug reports and patches, and help game engine designers target 90% of nVidia's user base without signing an NDA.
Proprietary drivers usually are the result of licensed code that can't be open sourced or IP concerns (giving away the "secret sauce", patent worries, etc).
Provided it can't be updated behind your back, I don't see proprietary firmware as particularly harmful unto itself -- it'd be nice if it were open and make the device less of a black box, but from the POV of the driver or user, there's not really much difference between a device with an embedded CPU running some firmware and a device implementing the same functionality in the asic.