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.
All Finagle Laws may be bypassed by learning the simple art of doing without thinking.