Yes, and patents have existed this entire time. And look at where we are now. IF we were still using punch cards, then you'd have a good argument that software patents stifled innovation. But we aren't. You're agreeing with my point - software has advanced incredibly far over the past 40 years, so any claim that software patents stifle innovation has a really high bar to jump.
If I understand your argument well, you're saying that because software advanced so much in 40 years with patents, then patents must be great for innovation of software.
If that's the case, how come other patentable things like car parts didn't advance as much? WHERE IS MY FLYING CAR?
Seriously though (wait, was I joking? Anyway...), I can't help but imagine two situations:
First, if we were still using punch cards and/or software had not advanced as much as it did but still advanced, how would we be able to tell that it could not have advanced much more without patents?
Then, how to tell if all this advance we did have would not have happened in 20 years instead of 40 if there were no patents?
Maybe it's time to do some real science and show examples where patents helped or hindered innovation so that the argument can continue.