It can go rather hideously wrong, with the open source version being neglected, downgraded, or simply made non-functional to push people onto the paid version. This was happening for a while with SugarCRM - I don't know if anything's changed there since I last looked, but it feels just like a bait-and-switch.
Where I know of it working well, it's where there are separate legal entities to manage the open source code and the premium version.
I don't really care whether he does that or not, but I see it as part of a larger trend: open source software supported by a freemium business model.