Sure, Apple only really sells hardware directly, but the software is a significant part of the reason a lot of people by Apple hardware (e.g. 'Mac's don't get viruses', 'iPhones have a better user experience').
 Sure, Google has some significant internal efforts for supporting better user privacy (e.g. https://googleonlinesecurity.blogspot.com/2014/12/an-update-... ) and Apple maintains some superb open-source software (e.g. http://llvm.org/ ). But in the end, Google can't be a "privacy company" without hurting their business model and Apple can't be an "open source company" for the same reason.
 Or the non-trivial inconvenience of being a self-hosting free software purist
The future, in fact, belongs to this third business model that helps a business earn profits without hurting its users in any manner. Ultimately, all the IT companies will have to embrace this model in order to stay in the market and survive. Competition will ensure that they will.
Two example disadvantages:
1) As it is, support and customization for specific non-technical paying users are among the things many top engineers least like to do. The reason being that it takes away from time solving the problems of the large mass of non-paying users. Even under the support & customization model versus the proprietary model, the number of paying users is much smaller in the first case in general, which creates a smaller "high priority" class of users.
2) Certain features and applications, such as traffic-aware maps or voice recognition engines are easy to build by huge centralized organizations which hold all the necessary data. They are challenging things to implement for loose collectives of smaller software companies, specially in a privacy-aware way.
One way to solve that would be to have governments support and subsidies open source software development, but I don't see that happening in the next 5 years at the very least.
There is something to be said about the market's ability to make decentralized decisions and focus on satisfying people wants, so a centralized software economy is also not a good solution. The problem with markets here is that strong privacy and open source are, for the most part, positive externalities. As a user, the benefit you get from having strong privacy yourself is not usually noticeably high, nor that of having access to the source, specially for a non-technical user, yet society arguably benefits from both. Usually the answer to a problem of unaccounted externalities is government regulation, but in this case, large-enough-to-matter governments have been unanimously on the side of less privacy, rather than more (as is the case of the original article).
 Ideally, software should be designed so that it preserves privacy as much as possible while achieving its function, and is open source, and it provides all the million features and reasons people use something like Facebook, Snapchat, Youtube, etc. Just having privacy preserving software written for and by technophiles is not and can never be a complete solution.
(Which does not invalidate your point one way or the other.)