I think the point is that it open Joe's business to more risk. By not realesing it as FOSS, somebody would have to reverse engineer it or design the same functionality from scratch. Either way someone has to put some amount of effort into building the software before they can clone Joe's business and start making money off of it. This is a barrier to market.
So why should Joe open up his business to increased risk by removing a barrier to market? Especially if he has heavily invested in it and needs to recuperate those costs. Since the risk is proportional to the effort, it doesn't make business sense in this situation.
And whether it happens with proprietary software or not is a different issue. At that point its because someone cloned the idea or it wasn't a successful business model. Either way it is not because somebody took the actual result of your effort (i.e. source code) and relabelled it with minimal effort to start a competeing business.
With all that said, I do believe in FOSS and want to see more FOSS. I think it has its place. I just don't agree that it makes sense (from a business POV) for all companies to make all their products open source.
I find it funny that people find it strange that I like my systems a bit loud. Loud fans, loud clicky keyboard, etc... they obviously did never own an IBM XT lol. I find vacuum cleaners suspiciously quiet these days.
The cool thing is though that Lotus 1-2-3 held on really long in enterprises. Up to 2010 a lot of enterprises used it as main system, and IT consultants were paid good money to make it talk to SharePoint and other MS subsystems. And by the time MS finally found itself in a position to uncork that bottle of champagne for the demise of Lotus Notes, everybody wanted to give MS the boot and move to linux lol...
If you release proprietary anything, you have to defend your right, and it gets ever more costly and involving to do so. You have to invest huge amounts of time and money to keep that arbitrary valuation of your IP on your balance sheet, to the point where - given the short lifespan of proprietary products - you should rather consider it a liability than an asset.
Open source software or hardware can of course be copied and cloned and forked and copied and then made proprietary, but it's actually relatively cheap and easy to prosecute those who violate your copyright, because other software will be built upon yours and the devs thereof will have an interest in prosecuting, and the upstream will have patched based on your findings, and other branches will have based off of that and in the end, there is an entire army of copyright holders behind you, and the companies that use that software in their core business model.
With proprietary assets, you stand alone against everyone that isn't paid by you to be on your side.
Secondly, it just costs a lot less to develop and open source projects, but you have much more development assets to your disposal, so your product will be much more mature and solid than if you would have had to pay for every proprietary bit of it yourself.
And if someone clones or forks your code, that's often a blessing. Example from my experience: I brought out a product a couple of years ago that did really well for about a year, and then was technologically obsolete. But there were still users paying for support. That support was cheap in the first two years of the product, because there were a lot of paying customers, but afterwards, it was getting much more expensive because the number of paying customers was less and I had moved on to other products. But a dev still spent about 18 hours per week in the 4th year after the release of the product to provide support. Lucky for me, the project was forked in the third year, and by the fourth year the fork was developed at a point where I could just forgo development hours in the support. The economic superiority of open source development is undeniable, it really is, whatever real life situation you throw at it.
I don't know if GPL solves all the problems of the world. In fact, the GPL needs property software like the Jedi need the dark side.
Let me explain. The GPL is about FREEDOM. The whole philosophy is freedom. It chooses to provide the freedom to have freedom - free code.
However, you also have the freedom to sell out, buy property code, get locked into the apple ecosystem, etc.
Without property code there is no need for the GPL. There would be no hardcore dedicated FOSS devs, who are in it for the movement. Seriously thank you UNIX for we have Linux. Thank you bell labs - we have GNU.!!!
They move each other forward and neither realizes how important the other one is.
Honestly, look the affect Linux is having on Microsoft Windows. Seriously, they've had step their game up.