> people would literally create new original OS kernels to fill the void Linux left if Linux for some reason stopped existing as a free option
Well, no, they'd use the other Free and Open Source Unix-like kernels, in particular FreeBSD. If we woke up tomorrow and there were no Free and Open Source kernels around at all, we would of course want to create one. This is why the Hurd kernel was started, after all. [0]
There are already various non-Free kernels out there. Windows is the obvious one, but also HP-UX and Oracle Solaris. There are also some freely available proprietary kernels, such as Menuet 64.
> you will never find a lack of free compilers, OS's, programming languages etc
It's fun to dabble in those fields, but doing serious work in compiler engineering or operating systems is just that: serious work. Major FOSS projects are very often powered largely by paid developers with specialized skills.
> since companies wants a free OS for their servers they would start to contribute to whatever OS that looks the most promising, we would have another free big OS for most service needs running very quickly
Hopefully we would, yes.
> I should have said "most products that aren't fun aren't free", there are exceptions
Not really, no. The list includes the Linux kernel, MySQL, Postgres, OpenJDK, GCC, LLVM, Chromium, and Firefox. Those aren't mere exceptions, and they're not the kind of software that can be achieved on a have-a-go basis.
> the main point is that developers using these free products in no way clashes with developers getting paid
Right, as I've been saying, business interests can align with those of a FOSS project, hopefully benefiting both so that sustainable progress can be made.
> the things 99.9% of developers are paid to work on aren't things they use for free
It's not clear what you're saying here. You're right that most paid software work is not released as FOSS. A lot of paid software work is on software that isn't intended for use by software developers, so they're never going to be the user anyway.
[0] https://en.wikipedia.org/wiki/GNU_Hurd