If my imprecision bothers you, feel free to s/con game/shell game/.Your imprecision, as you call it, is that you are associating Dropbox saying they're working on an API with a shady person trying to steal your money. Unless you've paid them for an API that you didn't receive, they haven't conned you.
I don't think you know what the value of free and open software is.
I'll hazard a guess: It's free, and also anybody's able to improve it if they want. I've only got five years' experience with open source, though, so perhaps I'm still an amateur at this.
To clarify one other point. Ubuntu has already reverse-engineered Dropbox (as Ubuntu One), so if Dropbox's profit relies on their having the sole access to the magic formula, it's already too late. Anything can be (and generally will be) reverse engineered. I don't think that closing off the source is a royal road to success.
So they use Dropbox's exact code? Or are you saying that they saw what Dropbox did and decided to copy it? Because that's not reverse engineering.
Funny story: Once upon a time I thought that open source would lead to everything getting better. I thought Firefox, for instance, would just continue to be an unstoppable beast because, after all, anybody who wanted to could make it do anything any other browser did. Then I realized Firefox was slow and ugly on the Mac, moved to the closed-source Safari, and enjoy its incredibly sleek design. It was around the time I stopped using Ubuntu because I realized the closed-source OS X was better. Now that Windows 7 is spreading, I think Ubuntu's dropped to my third-favorite OS.
The problem with your line of thinking is that open source doesn't pay. The best people in certain fields, meanwhile, only work for money, and occasionally only for large gobs of money. That includes interface designers, and a lot of the people who work on fixing the ugly problems that nobody really likes working on. So open source's downfall is that it can't compete with the quality and focus of closed-source. It's the problem with democracy, so to speak.
I like open source for some things. I still haven't found an open-source application that's as cutting-edge as its closed equivalents. Even Quicksilver left me dissatisfied until I discovered the Google-sponsored Quick Search Box.