The joys of open software
Being the head of one of the most successful and innovative open source movements in the world clearly has its freedoms. No paying customers means zero commercial obligation to keep supporting them, and one can just walk away without a care in the world. Bliss!
So there's a little lesson. You really can't count on free software being sustainable in the long run. If your product life cycle isn't going to evolve at the same-ish rate as the free software you're currently depending on then it's not necessarily a good idea to use it in the first place. Many people use Linux as if it will be there forever, and will always be the best thing in town. With enough people using it that will probably become a self fulfilling prophecy (certainly no bad thing!), but it's not written into any contract anywhere that that really will be the case.
In practise I suspect that it won't matter that much to embedded 386 users (I'm not one - PowerPC me). Embedded software is updated far less often than mainstream IT, and if it works now it'll keep working. I can understand Linus's point of view, and it will be quite a long time before it becomes a major headache for the users of these ancient chips.
On a side note, a Linux driver dev I know moans that Linux is a bit Mozilla-ish. Every major release changes everything all over again and drivers have to be re-written, etc. etc. It's a ball ache to keep up. That may indeed be the price of innovation and progress, but on the whole many people would prefer a more considered approach. Device driver devs matter a lot, and if they get too fed up and stop bothering? Well, that sort of thing can do real damage to an OS.
MS (and presumably Apple) long ago learnt the true value of drivers, API stability, etc. Like it or loathe it, the fact that Windows XP has been maintained all this time, still works, and so forth is fairly impressive and has meant that many paying customers have stuck with MS. Windows 7 looks like it will go the same way, and that's good news for many people out there.