1) The PC software world did run for quite a few years on the model of predominantly commercial/proprietary software, most of it being closed-source, so it's not like it is some far-fetched idea that doesn't work in economic terms.
Personally, I prefer the commercial license/source-included model, with the emphasis on the author/company getting paid to ensure that the situations like the one described here are avoided. You can then have additional educational licenses for ensuring access to developer tools for educational purposes, but that's up to the author/company.
2) If you directly pay someone to write software, I would expect any such arrangement to include the source code as part of the work product, regardless of the ultimate visibility of the source code to outside parties.