> there's no real cost to manufacture and distribute software
Do you know where you are writing this? God, even if you managed to find people that are willing to sacrifice their >$100K/year for a good cause, "local storage" has both a start and a maintenance cost, especially "massive" ones.
And copyright is a legal issue, not a technological one
Yes, in a community of people with a bent towards making things to scratch an itch. Some of them are highly in favor of monetizing those things, but yet not all, and we have been known to favor open source projects from time to time.
As for how would development be funded, a group effort, open source.