It seems like they've cut a wide swath for (probably) exempting the most interesting of the software that could have been developed in the open. > Applicable exceptions are as follows: > The release of the item is restricted by another statute or regulation, such as the Export Administration Regulations, the International Traffic in Arms Regulation, or the laws and regulations governing classified information; > The…
The important thing is that this changes the default. Instead of the default being closed and needing to justify open-sourcing something, the default will be to open-source things and having to justify keeping something closed. That's huge.
Ideally, with some sort of force opposing propriety, the incentive would be such that the government would think it in its best interests to granularize their code into small libraries, programs, and network services, so that they could open-source as much as possible, leaving tiny "classified kernels" as wrappers for libraries or plugins for apps.
For an idea of such a force: maybe create a "proriety credit" that a government department would to buy for each 1000 lines of code they refuse to release, whose funding goes to this effort to open-source everything else?