not sure how them hosting public projects adds directly to the bottom line
They get a ton of feedback and insight from non-paying users. The usage and feedback can drive both the product and business roadmap for their enterprise offerings.Every developer who enjoys using it for personal or open source is also likely to recommend it to their employer as well. I know I have helped drive adoption in a few organizations.
Companies like CoreOS, Mesosphere, all fall under this umbrella, where you could technically glue all their open source components together to form their main product, but it would take you quite a bit of time to support.
Github is sort of like this. They contribute a ton to open source, and are built mostly out of open source components (that ARE open source). But their website is really just a glue to all their infrastructure, and that's closed source.
That's not true, they have lots of open source projects under their organization: https://github.com/github. It's not enough to build your own GitHub clone, but some significant parts are being developed in the open (jekyll, hubot, linguist, ..)
This makes it sound like Github develops and open sources git, which it doesn't. They just built on top of it and have no control over the roadmap.
Again, lots of good has come from GitHub, not limited by:
Competition
Publicity of Git
Awesome free hosting for countless FOSS projects!
EDIT It's the same motivation as Oracle's recent "reverse engineering" drama, they don't want you to have the source. Will this end up true: those who sacrifice freedom for free deserve neither ?
[BTW: Franklin's "essential liberty" was actually self-government requiring taxation - like github charging; "purchase a little temporary security" was gifted funds for defense of the frontier - like donatiomware (e.g. OpenSSL after heartbleed). https://www.lawfareblog.com/what-ben-franklin-really-said ]
GitHub isn't just 'distribution' it has required a huge amount of investment and focus by individuals who need to make money to feed their families and prosper.
The fact that it is GitHub that we're talking about, and the fictional repos that you imagine would spring up proves the point - in the real world, open source is subsidized by closed source.