So, it would appear that the only people who are actually free to participate in OSS projects are self-employed or unemployed software professionals, students and enthusiastic amateurs. Anyone else contributing to OSS projects may be unwittingly engaged in illegal activity by stealing their employer's IP. This does not square well with the altruistic image of OSS.

There are more "self-employed or unemployed software professionals, students and enthusiastic amateurs" these days than 9 to 5 employed programmers. There are also a fair number of retired and semi-retired programmers, members or related professions - physicists, engineers, chemists and mathematicians and former programmers now in management. Also much OSS comes from companies like IBM, so it's hardly "illegal activity", and many programmers insist, as I do, that they have an agreement in writing that all progammming not in the product area of the company is theirs. Most companies have no problem with  this. They have no use for random pieces from a large FOSS project.

. Like any engineering design project, good software needs a designer (or software architect in the current industry jargon) with a clear design concept which must be adhered to rigorously otherwise the software becomes progressively messier as it is developed in a piecemeal manner. Fred Brooks, the computing pioneer and author of the defining publication in the software engineering field, The Mythical Man-Month, calls this 'conceptual integrity'. We only have to look at the history of the electronic computer to see that the greatest advances in technology have been made by brilliant, strong-willed individuals, usually supported by a small team of dedicated engineers - not community-based projects.

The oldest eristic argument trick in the book - the simple assertion of something false. Most people don't know enough software history to refute this.
Most large FOSS projects are modular collections of individually testable components. The history of large projects with "conceptual integrity" has been, on the whole, a disaster. As for small projects, why does the non-FOSS community have a monopoly on "brilliant, strong-willed individuals"? My experience is that there are more of them outside the corporate sector, beause they're too strong-willed to work in that environment, where they are considered loose cannons.

As for FOSS projects, Unix comes to mind. Even under AT&T a great deal of the utility software for UNIX was donated, and then there's Berkeley Unix. The Arpanet is another example. On the other hand ADA has all the conceptual integrity in the world, but even the government coudn't make people use it. The ISO protocols had lots of "conceptual integrity", but somehow we seem to have ended up with TCP/IP.

Innovation: The absence of design leadership in the OSS development process and a motivation for OSS developers to create free versions of their favourite proprietary software may also explain why there would appear to be a distinct lack of imagination in OSS projects. The open source community has so far tended to create facsimiles of proprietary packages rather than the next killer application.  Linux is an excellent example. Although it contains many powerful new tools and utilities, Linux is in essence a facsimile of Unix, a proprietary operating system first developed at Bell Telephone Laboratories in 1969. Ironically, the legendary robustness of Linux actually owes more to the good design of Unix and its older relative, Multics, than it does the OSS development process.