> In the software business, with pretty much zero regulations, competition has run the price literally to $0 for broad swaths of products.

That's like saying that price competition is alive and well because banks will give you a free toaster when they charge fees to loan your money back to you.

But to address the specifics of the software industry, software is a complementary good.

This has been the driving force in the price of software for decades: http://www.joelonsoftware.com/articles/StrategyLetterV.html

And it's true today. The biggest contributor to Linux is... Intel. Because it sells hardware. Google gives you a free browser so it can sell ad space.