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Tell that to Broadcom, Intel, Marvell, Qualcomm Atheros, and Realtek. All of them released open source Linux drivers for their wireless network products and they're still doing good business. So I don't buy this line of argument.

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Most of those drivers are shims for huge binary blobs.

That might be true, but the general point is that most drivers in the Linux kernel don't need blobs, and they are in many cases written by manufacturers of the hardware.

Competing manufacturers have not suffered as a result of releasing free Linux drivers, and arguably are profiting from it.

They aren't. There's firmware in there but it's usually not very big. Look up softmac vs. fullmac

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