Why? That's the very reason that many businesses are now looking at OSS. OpenOffice at $0 per copy looks a lot nicer than MSOffice at $450-$550 a license for most small businesses. Microsofties tend to forget that such businesses really only use a small subset of MSOffice's features and that that set can be duplicated by probably any competitor to MSOffice quite easily.
My point is that, if OpenOffice charged $450-$550 per license, nobody would buy it.... because it's a lesser-quality product than Microsoft Office. The only OSS/free products that would survive as commercial products are the ones that aren't crappy. Apache and Perl come to mind as examples that would thrive, but I'm sure there would be others.