And if you want to do a commercial spin-off from your university work, it might be easier to put it all out as MIT/BSD/Apache and then start a completely independent company than to deal with all the paperwork.
This makes life easier for competitors, so it's definitely a tradeoff, but it's the right tradeoff in some circumstances.
I think this is greatly overstated. Generally it's just sheer volume of capital and dedication to building a business that dictates market advantage, not any given persons' knowledge or know-how (though that's obviously worth paying for if you have the capital). I'd argue the primary reason why proprietary ownership of software exists isn't to make life harder for competitors but rather to make it harder for folks to figure out what they're actually paying for and bypassing the fees to actually fix (let alone improve) the software.
This makes life easier for competitors, so it's definitely a tradeoff, but it's the right tradeoff in some circumstances.