I've been having ongoing discussions about this topic because I had a similar opinion to begin with. The problem is the way a lot of that source code they're trying not to share is licensed.

A lot of the code causing problems is not RedHat's to choose not to distribute. It is Free and Open Source Software licensed under the GPL, a copyleft license that explicitly grants the rights to copy, redistribute, modify as you see fit... as long as the resulting code is also licensed under the GPL. Reason being, this promotes a benefit for EVERYONE, vs. a benefit for a corporate bank account.

While RedHat is not explicitly stopping people from distributing GPL licensed code within their product, they are saying "well you can, but if you do we're going to stop providing our service to you." They're strongarming people into not exercising rights explicitly granted to them based on the way code RHEL is using is licensed.

This course of action is not technically against the GPL, but... I'm sure you can see how it's a very shitty thing to do.

Imagine you went to a donut shop and they had a buy 1 get 1 free offer, so you go buy a donut and get a free donut that you want to share with your friend. But the person at the counter stops you from giving the donut to your friend, saying "Woah, we gave YOU that donut. You can't just give it away. If you give your friend that donut either you'll have to pay for it or they will, or you'll be banned from the store and you can never buy another donut from us again." That's a shitty oversimplified analogy of what's happening here, but I think it gets the point across.

They consented their framework to be used for development. I don’t consent my app to be redistributed. Why is it an issue?

Are you using GPL licensed software? Because you need to consent to that license, which can include redistribution. (N.b. that Linux is GPL v2.)

It isn’t their right, because they are using software that explicitly requires that you provide code to those who you distribute to, and that those people in turn must be free to use and modify the code as they see fit as long as they also share it with whoever they give it to. A vast majority of the code is not owned by Red Hat, and even the code they do have is most often released under this same license.

This is a basic feature of the copyleft license. This is why Microsoft called the GPL cancer in the past.

The way to make money is support and development resources that are not available in the knockoff.

The issue is that it's not about RedHat not wanting to redistribute "their source code". The various Linux distros are the result of a huge number of voluntary contributions from tens of thousands of people (many of which happened before RedHat was even a thing). The only reason all of those people agreed to contribute is because it was licensed in such a way that no one could later come in and take all that work for themselves. That is a huge advantage and the code that underlies RedHat's business simply wouldn't exist without it. The disadvantage (from an individual seller making money perspective) is that you can't charge for the code itself based on any IP rights in that code and have to make money from accessory services (warranties, support, educational resources, enhanced security, customization and installation, SaaS or IaaS). RedHat not only encouraged the community to contribute, it put itself out as a champion of the free (as in freedom, not beer) software movement. Now it's trying to sneakily hinder those same freedoms. Aside from any business model arguments, that's why people are pissed.

My personal take is that this is not a about code, or licensing, and certainly not about money made from direct sales.

The code is open source and free software. Red Hat used to be proud, that all their code is free software. Even if they change this mindset, 99.99% is already available as free software for anyone who cares about it.

Red Hat provides some value on top of what's available elsewhere, but they don't have a monopoly on this added value either. You can get a full-fledge linux distribution from Ubuntu for free, you can also buy professional services from plenty other vendors.

What's the problem? People, in particular people you can code, trust Linux or Red Hat because the code is public. I don't want to compile from source; I don't want to review this huge pile of code. However, since the code is widely available, widely used, and transparently built from a common code base, chances are that someelse has looked at the source code. It's much harder to hide a backdoor, intentional or not, if the source and build process is public.

Maybe you can compare this to elections in a democracy. Everything is public. Anyone who cares can watch the whole thing. This generates trust in the system.

Red Hat or IBM is changing the system, creating doubt. Realistically the code in RHEL will not differ much from what's publically known, but there's a wall of fog now. And those who know is discouraged to disclose the delta.

Also, culturally, Red Hat is signalling they want to talk to 'corporate' buyers, not their 'actual' users. Sure, RH and the clients have always been corporates, but friendly.

Red Hat was one of the first distros and the first big player in open source. Now, open source is everywhere, but Red Hat is dead.

A number of people have already helpfully suggested learning more about the GPL, but as a prerequisite, definitely read up on the Dunning-Kruger effect.

A Comprehensive Analysis of the GPL Issues With the Red Hat Enterprise Linux (RHEL) Business Model – Software Freedom Conservancy

Sorry, but you don't understand open source or the GPL.