I think you're missing the larger picture here. If someone like IBM or Apple, or Google were to accidentally use a license like this (which is otherwise free) they could waste millions defending it in court due to some lawsuit. How would that look for Free Software? Probably even worse! "Google sued for using Free Software" -- Headline on the NY Times.
That's why large corporations have hordes of lawyers to help with such things. There is no such thing as accidentally using code under a certain license and there are procedures in place to handle that.
It's no different with using commercial code that was licensed to you, anyway. You still have to adhere to the licensing terms and if you don't they can sue you.
Of course large corporations have lots of lawyers to protect against this (and of course they hire enough engineers to rewrite the thing to begin with), which means I didn't illustrate my point very well. The point is that there is potential negative impact on free software as a result of a "cute" addendum like this.
Frankly I think the GPL, or even worse, the AGPLv3, have just as much, or even moreso, potential to "harm" free software as you describe. Nobody loses sleep over other people using those licenses as they please though.
I think maybe I'll switch to an AGPLv3 license with a no-evil modification for my future personal projects...
How does AGPLv3 or even the GPLv3 harm free software? It's certainly more permissive than MIT with the "do no evil" clause.
No one is stopping some dude from taking a large chunk of MIT or BSD licensed code modifying it and then closing it off forever. That fork could become the one to use while the pre-forked one dies in a fire because the software is no longer compatible with the new shiny one with feature X. "Oh crap! I'd like to fix this bug that's been plaguing me since I switched over to the closed source one, but now I can't." -- Some sorry dude who used BSD licensed software
Those who say they don't care about this sort of thing are lying to themselves and everyone listening.
There's this stigma around the FSF licenses, which has never made sense to me. The whole point of them is simply "I share with you, please have some common decency and share with me." This seems like common courtesy to me, and only fair. If some corporation really wants to close everything up, well the same logic for avoiding Crockford's license applies, just rewrite it and don't use it. But, he who shares should always win.
Permissiveness, or lack of it, isn't relevant at all. How I interpret the complaints with the 'no evil', the issue is the 'gotcha' factor, which arguably is out in full force with the AGPLv3. How many companies have botched handling even the GPLv2? We hear about it all the time.
I sincerely like the GPL and AGPL. I don't think potential confusion is a compelling argument against either, nor do I think it against the "do no evil" clause.