There is no way that Free Software was going to become mainstream except by becoming just another flavor of Open Source.
See, people used to say the same thing about Wikipedia. Yet the Free Encyclopedia that Anyone can Edit is licensed under the GPL-like GDDL and the share-alike version of Creative Commons.
And I can write software under the Apache license and everybody can use it, Free Software and Open Source alike! Yay!
...provided you don't step on any patent landmine, and that a big player doesn't try to shut down your competing start-up. What good is free software if you can only make small projects with it, and can't use it to compete with the entrenched industry?
Have you heard of the UNIX wars? People using UNIX systems in the 70's felt the same way, and then large companies started to try closing free reuse of the platform and collecting royalties, as well as closing the source of essential drivers and modules, so the "free system" with "source available to all" became a clusterfuck of competing systems with unclear legal status.
Given the current state of things, the same is bound to happen sooner than later; in fact, it already happened in the case of Java. The Oracle/Google case is a recent example of how you can't really use open source software if there aren't strong guarantees, and Google had to pay for it.
In the old days before the OSI, a project like Android would have been shunned by the FLOSS community; Google would have been forced to open-source the full stack, or build their own proprietary from scratch.
As Google needed at the time to come up with a mobile operative system, the second option would have been too slow. If the community have made a strong stance, they would have had a chance to make it happen, and all our cells could have been running a nearly-open stack, instead of a nearly-closed one; and projects like Meego and LiMo might have had a chance (there were very BIG players behind them). Don't subestimate the power of politics.
Unfortunately, as the above linked article explains, the focus shifted from guaranteeing strong freedom to all industrial parties (which is what FLOSS was about, not merely allowing users to get the software for free), to guaranteeing fluidity of development for small teams; the possibility to grow big without interference from the main players was lost in the process.