If I'm reading the article right, he's only done work for UW for one out of the last 5 years. That seems to me to be an enormous amount of flexibility on their part.
Yes, that's correct. The math department has been as flexible and supportive as they can possibly be. They won't let me be on unpaid leave again only because the university won't. However, it's not like the mathematics department at UW has a lot of money just laying around. I don't think they have even a single position that is paid for by an endowment. It's very different than other departments I've been at. I was Harvard University's math department for five years, and they had far more discretionary money than UW math; also other organizations on campus such as Computer Science have received significant donations. The mathematics department's money comes mainly from the school allocating funding in exchange for teaching many important courses.
Yes, but you'd think the university could find a way to directly support building the software.
I used to think that too. I only started CoCalc when I realized after a decade that this probably wasn't going to happen (for me).
UW as an institution cares mainly about getting all that Silicon Valley they saw Stanford get from Google and followers, so they can find administrators and build fancy buildings, not about research and education. Non-commercial research and teaching has been on a long decline, sustained only by previously tenured professors.
It's a university. Work for UW is supposed to be generating valuable research and education, which is what Sage and Cocalc do.