There's always going to be free services, don't worry. I'm sure the open source crowd won't stay far behind, they're able to innovate far faster.
Seriously, as much as I like open source software (and I really like it), I can't agree with you on this. I think you're doing raymondism.
There is little innovation in the open source world; it's mostly about making better implementations of things invented long ago by companies or universities. But that's OK because in the end we get good software.