Having also lived through this....
Remember, that prior to Minix, Linux or any of the x86 BSDs, the idea of a personal, affordable, up-to-date Unix platform was something of a Holy Grail. The basic options were either expensive (SCO XENIX), loosely compatible (Coherent, PC-Unix) or discontinued surplus (AT&T UnixPC). The stage was set for somebody to take over the world.
In the beginning, you had two choices for running BSD on a 386- BSD/386 or 386BSD. BSD/386 was an expensive commercial product. 386BSD was free, but initially flawed and slow to release updates. It was a project basically under the control of a single person, William Jolitz, and his wife.
Quoting from the Wikipedia entry for 386BSD:
"After the release of 386BSD 0.1, a group of users began collecting bug fixes and enhancements, releasing them as an unofficial patchkit. Due to differences of opinion between the Jolitzes and the patchkit maintainers over the future direction and release schedule of 386BSD, the maintainers of the patchkit founded the FreeBSD project in 1993 to continue their work. Around the same time, the NetBSD project was founded by a different group of 386BSD users, with the aim of unifying 386BSD with other strands of BSD development into one multi-platform system. Both projects continue to this day."
In this case, the issue was not elitism so much as vested self-interest. (The Jolitzes has various ties to Dr. Dobbs Journal and the original 386BSD porting effort was documented in a series of articles.
The AT&T lawsuits did occur at this time, but is has been noted that 386BSD was never party to any of them.
My personal feeling is that the success of Linux was a combination of timing, personality and community response. Had Linus taken a more controlling stance (not a benevolent dictator), things might have gone very different.