Why sell something that is free?

I saw nothing here about actually selling open source software, only selling proprietary systems layered on top of OSS, and on selling services.

It probably doesn't help that analogy has a few issues. There are few "eskimos" in Canada because the term "Inuit" is preferred - see https://en.wikipedia.org/wiki/Native_American_name_controver... . Nor are there penguin invasion issues as wild penguins are not present in the Arctic. I also suspect it would be easier to cut and transport sea ice than use the method described.

> customers can build out the proprietary ‘paid’ version of OSS.

Sure, but that's not really selling OSS, since parts of it are proprietary.

> Does the Eskimo want to build his house? or just live in it?

I believe this is supposed to be a reference to an igloo, which is made from compacted snow, not ice. Leaving aside the fact that few live in igloos, another dimension to this question is, how reliant to you want to be on others?

> a reason why Software-as-a-Service offerings have become very popular

Note that "SaaS" isn't "selling OSS", it's selling a service.

For what it's worth, I have sold OSS. There was no $0 "free" version. When you paid $30,000 for the software, you got the source code under the MIT license.