I find it paradoxical that people would question the need for a competitive marketplace of ideas in societies that tout competitive marketplaces for businesses. I also find it paradoxical that societies that tout individuality and freedom would question the need for others to express those very values, in preference of conformity and centralized decision making. We have seen the consequences when it comes to both commercial products and open source projects. Just consider the uproar of when KDE, Gnome, or Windows changes the user interface in controversial ways.
Yes, it does cost Linux in terms of user base. On the other hand, it is better (in my opinion) for the open source community to differentiate itself based upon its core values and to ensure its long term viability because of that.
The past is littered with failed companies that tried to take on the juggernauts while Linux has survived. A big part of the reason for Linux's survival is it's fluidity. When one project stalls, another can take over. When one group's needs are unmet, a new project can emerge.