I think I understand where you're coming from.
I haven't read the v3 draft, so I only have this thread to go on.
I understand your point - businesses won't want to take code under GPL v3 and customize it for their business advantage. So there'll be less business use, and Free Software won't progress as far as it would under v2 or similar less restrictive licenses.
Right?
But that's not what GPL code is for, as I understand it. If you ignore Stallman's views that are often spun as anti-business, I think what he really wants is a free/Free base of software that everyone can build upon. It's about freedom for the user - everything else is secondary. If people aren't reinventing sorting routines (or whatever), then a richer set of software will be available sooner for everyone's benefit.
Similarly, in your example, if everyone buys into the Free aspects of the v3 license, then everyone will benefit by having faster database queries, etc. And the software will be more appealing to work on as it will have more users and a more vibrant developer community. So new features and other improvements will be added to it quicker. Thus the original company in your example will benefit from a richer developer community for the product. Everyone benefits.
Your criticism, it seems to me, could be applied to all GPL v2 software. Why would a large corporation work on GPL software when shipping it to [link|http://www.fsf.org/licensing/licenses/gpl-faq.html#InternalDistribution|an offsite contractor] of the corporation would be redistribution and thus require releasing the source? Aren't they giving up their competitive advantage? No, the corporation recognizes the benefits of using available source code and accepts the restrictions/freedom imposed by the license.
You have a lot more experience with this issue than me. But I think Stallman and the FSF is just continuing with their view that software should be Free. If you take GPL code and modify it, then you need to give the improvements back.
I think it'll work out, or people will find ways around the restrictions (without breaking the license). If not, there will be a lot of forking and/or a lot of code that will stay GPL v2. Either way, Free software will continue to thrive. Nobody knows, at this point, whether a v3 license would slow or accelerate the rate of uptake. (A lot may depend on what MS does with Longhorn and the XBox 360.)
My $0.02.
Cheers,
Scott.
