The reasons to write an OSS app for Andriod or iPhone are the same as any other open source software.
I developed an Open Source game for the iPhone called Dark Nova
. We're looking at porting it to Andriod right now. The game is based off Space Trader for the Palm which is itself GPL.
Dark Nova is open source. We build the retail app from the Google Code repo. We charge $1 for the game in the App Store. So far this has worked out pretty well. We've had an OSS developer contribute some helpful code. Starting with a port instead of from scratch lowered the initial risk/investment for a 1st time app developer.
Our game is for sale and we're making money on it. The code is under the Apache License. The graphics and music are copyrighted and the name is trademarked. I think it's a great model and holds true to the path laid out by Red Hat and others. If someone wants to take the trouble the "roll-their-own" they can have the game for free. Most folks just pay the dollar. If someone wants to use the code. It's up there. If someone wants to help, they can.
Of course the motivation of this post is a shameless plug. This is my first OSS project and I could use any help/advice I can get with development or management of the project. The Dark Nova Google Code site is here