You think that people understand open source as free (as free to re-use)? I don't believe so, there are many open source licences for these reasons, depending on the willingness of the authors. Linux is open source or not? ;)
Least restrictive
* MIT/2,3,4-clause BSD/Apache (pretty much anything, the terms are clear (except Apache))
* LGPL (usually for libraries that can link to non GPL stuff)
* GPLv2 (if you change the source and ship product, you must reveal the source. can't link with other licenses)
* GPLv3 (closed the Tivo loophole)
* Affero GPL (no services)
Without a license being specified, it's difficult/impossible to include a project in anything commercial.
GPLv2 : You may copy, distribute and modify the software but you must relicense any changes and your entire project under GPLv2 and disclose all the source code
GPLv3 : You may copy, distribute and modify the software as long as you track changes/dates of in source files and keep modifications under GPL. You can distribute your application using a GPL library commercially, but you must also provide the source code
AGPL : The AGPL license differs from the other GNU licenses in that it was built for network software. You can distribute modified versions if you keep track of the changes and the date you made them. As per usual with GNU licenses, you must license derivatives under AGPL. It provides the same restrictions and freedoms as the GPLv3 but with an additional clause which makes it so that source code must be distributed along with web publication
The most restrictive for me for commercial use is GPLv2, because you have to open source ALL the project, not only the modified part. With GPLv3 and AGPL, just the modifications of the source code , not all the project. It is a question of point of view about "restrictions".
The problem with oauth.io is I could spend time learning it to use it on a personal project and then not be able to apply the same knowldege on a client project where the client doesn't find the copyleft situation acceptable.
How exactly is this different from GPLv2, if the web service you were writing was going to be shipped on a router? and why should you be allowed to use someone else code but then prevent others to see your modifications?