I think what Yubico meant is that they aren't closing code for the sake of closing code, but since it can't be loaded onto the devices anyway, there's no need for the code to remain open.
In think the "vs" in the title is saying this: they had to choose between open source (that is functional meaning you can really use the code and re-flash the device) and the secure hardware. It was a trade off of one "vs" the other, and this is their reasoning behind that trade-off.
If Yubico did this it would be very interesting to see the reaction.