"A fundamental weakness in the free software argument is that it lacks a solid, broadly applicable proposal for remunerating the effort of software engineers."
Quick counterexample: the many thousands of programmers whose job is to adapt or maintain free software for the organizations that use it. That includes people working for small companies, large companies, the government (civilian and military), non-profits, political campaigns, etc., etc., etc. It is almost never the case that any software package meets all its intended users' needs, and someone needs to adapt the software when that happens.
"without a clear mechanism for producing free software it's little more than a letter to santa claus"
Clearly such a mechanism exists, as free software is very important and widely used.
"My impression is that FSF tends to focus on volunteerism and heroics"
Hm...