Including Nvidia's binary driver by default. Obvs Debian, gNewSense, and GUIX can't do that, but since when have corps cared about them?
Like, don't get me wrong, I'm a FOSS or GTFO kind of guy, running Debian and Replicant, but shipping proprietary drivers by default is what chrome is hinting at obviously.
The combining of proprietary and GPL code has to be made by the user and the result is un-distributable. That's why distributions cannot ship it.
What they can do is to make the above step easy (which Ubuntu does).
And second, to answer your question, partly because Linux is sufficiently good and has wide enough hardware support that it's still easier to use Linux legally under the GPL than to use another operating system, and partly because if you're going to use another operating system with narrower hardware support you might as well use a tinier embedded one and ship cheaper hardware (which is what Linksys/Cisco did with the WRT54G, shipping VxWorks and less RAM, and then selling the more-Linux-capable WRT54GL as a higher-end product).
AFAIU, Nvidia's legal argument is that their driver can't be 'derived from' the Linux kernel even though it's linked into the kernel since it's older than their Linux port and only is linked against their GPLed (and if push comes to shove, dual licensed GPL and proprietary) kernel abstraction layer. Judges don't care about linkers and the GPL doesn't actually say anything about linking.
This is about GPL infrigment; you can combine GPL licensed code with differently licensed code, but only in your privacy, without distributing the result to others. Once you would distribute the result, you would be breaking GPL, thus having no right to distribute.
> The "Program", below, refers to any such program or work, and a "work based on the Program" means either the Program or any derivative work under copyright law: that is to say, a work containing the Program or a portion of it, either verbatim or with modifications and/or translated into another language.
The argument that I've is that even when linked together, the Nvidia binary driver isn't a 'derivative under copyright law' because it doesn't have Linux specific entry points, and is older than their Linux port, and therefore isn't part of "The 'Program'" as listed in the GPL.
Your argument is, why some piece of software should (or should not) be relicensed to GPL.
My argument is, that since that piece of software is currently not GPL licensed; avoids the relicensing topics and explores how to solve the current situation wrt distribution of the combined work. Use by the end-user is non-issue, due to freedom 0.
Chances are, that you are using modesetting X driver anyway (i.e. the KMS driver, the same driver/backed, that is used by Wayland).
AFAIK it works with Gnome's Wayland Implementation, but not with the one from KDE.