The code has already been publicly released (by SCO). It's now a matter of determining which lines -if any- need to be replaced. Before the courts can render a verdict, SCO will have to provide evidence. IF the courts rule in SCO's favor, you can bet that the source (a person) of the code will be identified. Code originating from that source would be purged.
the growing loss of income to US software companies who sell products for profit,
There is one particular entity that has caused plenty of US software companies to lose income by bundling "free" application programs with its OS. Over the years, that model has not worked out too well for many companies, and more companies recognize the danger each day. If it's OK to develop and bundle free apps with an OS, it's also OK to develop and bundle a free OS with your hardware or services.
further expansion of insecure code created by foreigners into US markets and government
I am also wary of foreign code, but it's coming at us from all directions (H1B visas, outsourcing, etc). Having US companies inspect and certify distributions/installations is probably the best that can be expected. Unfortunately, there is a great deal of closed source that will never be seen by the eyes of 3rd party analysts.
I also have a problem with Torvalds ego, whereby he refuses to give up personal ownership to IEEE at minimum, but instead insists on complete authoritative rights.
Who knows, maybe some shyster lawyers can back Linus into a corner and force such a decision. It's a real shame that you, personally, don't get to dictate Mr. Torvalds' decisions for him. Maybe if you were to relinquish control of your projects to IEEE, Linus might follow your example. Hey, can you imagine the result if Microsoft gave up ownership of Windows to the IEEE? ;)
Your lead in sentence is completely bogus, likely making the rest of your post worthless as well.
Hey Red, your communist dreams are showing....