I have never worked on a piece of proprietary software that would be in a state where it could be released publicly in any form without a very large outlay of development time and money. I'd be very surprised if github is any different. "Why not" is for things that are easy to do. Things that are hard and / or expensive to do require strong justification.
Honest question - do you think if the proprietary software you worked on had been planned from the beginning to be released publicly, a very large outlay would be unnecessary?
Not him, but if I were writing something that was going to be publicly released then I could imagine the team would:
a) Have to include a lot more documentation
b) Be a lot more paranoid about best practices, and writing generalizable code even if it doesn't fit their particular slice of the market
c) Never have the chance to use a closed source solution for part of the problem (e.g. no we can't have half our app actually be a series of Oracle specific stored procedures, or buy a UI package for $20,000 rather than use a heavily modified version of Bootstrap).
Not at all - if it were part of the strategy from the outset, different decisions would be made along the way. I wasn't trying to say that it's necessarily harder to build software for public release, just that it's hard to publicly release software that was not built that way. But I guess I don't really know for sure - I've never worked on a project like that.
Because if you say to management "hey, why don't we release the code that our entire business is built off of for anyone to host for themselves for free!" you'd be laughed out of the building on your way to the psych ward.