"If rather than trying to make a fool-proof computer he was making a system that will manage all your VoIP calls and record your TV channels for you while letting you browse you emails and the internet through your TV I'd say he'd be onto a winner."
that's what koolu themselves are promoting (their little boxes for). the best available combinations at the moment are with voxbone and mythtv.
"When normal people get to choose between a locked black box where they can't use their favourite programs and between an unsecured open windows box"
you can always get it "unlocked" - i.e. ask for the root password. you just can't claim it's "trusted" any more.
"They'd only have to offer the source to those who asked for a copy."
of course. everything has to be free software - otherwise it can't be trusted. they just can't have the digital signing private keys and, if they ask for the root password, they're unlikely to be a "normal" customer (i.e. they're probably geeks) and they are likely to know what they're doing... and don't really _need_ a "trusted computing" platform from eddie's group in the first place!
"However, I'm certainly not willing to pay a yearly fee to have someone else admin my Linux box."
good for you. you're in the top .... err.... fractional percentage of people in the world.
"The only other place the source is an issue is if they're worried about competition in the same market segment."
...not really. the principle is more important - demonstrating that it's actually possible...
"However, the hardware, marketing, and the remote admin team are what differentiates the service. They can give competitors the software source and all without changing their business model."
... precisely. and our competitors aren't going to have the same digital signature private keys, are they! so those people who build up the best team, the best reputation as being "trustworthy" precisely as you correctly surmise.
you know how the free software business model works: it's all about being honest, about not doing "lock-in", and leading the way. in other words, it's back to the principle of guilds and craftsmen providing valuable service, instead of wage-slaving and ownership providing service you have to go to because there's nothing else.
so it's entirely essential that the whole process be open and absolutely impeachable, and actively encourages and invites competition. eddie's group actively seeks to be the one that breaks the ice - gets things going - and intends to remain the innovative market leader in the trusted arena.