Except... it didn't. The far majority of programmers still write closed source non-free code. The far majority of software is still closed source and non-free. The far majority of humans browse non-free websites on non-free web browsers running on non-free operating systems.
It might be true that most browsers are closed source running on top of closed source operating systems, but that is just one half of the picture. the other half tells a story of most web traffic, especially on most popular ones, is generated by open platform.
Vast majority of programmers are writing closed source. yet they do not affect the market as those who write open source.
The cloud has been great for the business of writing software, but not because it is more free or open.
The mere continued existence of free software/open source validates the ideology behind it.
As a libertarian/dyed in the wool capitalist, I love the success myself.
I doubt RMS considers the status quo a success. The free software movement that I know had a much loftier concept of "win" than mere existence.
I mean, http://www.youtube.com/watch?v=S76pHIYx3ik.