Yeah, what you say is probably accurate for a snip of time for intel PC programmers.
Uh, what? Microsoft wasn't a concern at the time. Ultrix, Tru64, AIX, Solaris, VMS, IRIX, MVS, Nonstop, and all the other relevant operating systems at the time used that licensing model. HPUX still does -- they ship a non-ANSI C compiler and a crippled linker. You can't compile anything without paying for a compiler or wedging GCC on there. MIPSPro was never free. suncc wasn't free, etc.
GNU was founded before the era of Microsoft dominance. I don't really like GNU (CDDL, Apache, or BSD license if you please), but OP has valid points.
"Hey Ivan, check your six." -- Sidewinder missile jacket patch, showing a Sidewinder driving up the tail of a Russian Su-27