It's not true that he killed GZZ. He had filed the patent already, & the GZZ developer (who had previously been working closely with Ted) dropped the project when he heard that a patent existed. (As far as I am aware, all patents filed with respect to ZigZag or Xanadu are expiring within the next few years.)

Several Xanadu implementations are already released as open source (the first one in 1999).

Believe me: I've tried to convince Ted that the appropriate way to get stuff to have traction these days is to develop in public, rather than keeping stuff secret during development & only releasing source when it's been polished. It's not that he wants a closed & commercialized system (though he hasn't completely given up on having some stake in monetization), but that he wants enough control to avoid the kinds of runaway misunderstandings that produced the web. If I had seen a warped version of my own work ruin the world, I'd be conservative too.

Now that web standards are so complicated that writing a new web browser is impossible for even large & very rich companies (Microsoft is ditching IE in favor of Chrome, following dozens of others), a properly-designed (and thus, simple) hypertext system becomes a lot more sensible -- for more and more people, the web will seem less and less like a reasonable compromise (being never a particularly good system for hypertext, and a far worse application sandbox platform). Some folks have been jumping to gopher, but others will probably migrate to new systems that are along the lines of Xanadu.