Earlier quoted context omitted.
Open source tends to work great for re-implementing technology that is already understood. It tends not to work for exploratory research, since that requires risk and ingenuity, not a designed-by-committee approach. R&D of this sort is funded best with a strong profit motive, unless the government is willing to shell out for it.
I'm not sure how that follows. Most big open-source projects are in practice owned and controlled by a single company/entity, and the processes don't differ much from what you'd see in-house. What you're describing sounds more like how standardisation bodies work than the realities of functioning software projects.
In order to work on pie in the sky ideas, you need to hire brilliant people for long periods of time, with low certainty of success. And this is expensive, and corporations will not generally do this out of the kindness of their hearts... the stars align sometimes where the private incentives and public interests are the same.
Xerox PARC, Google X, Bell Labs, and so forth meet this description just as much as DARPA.
But the traditional direct profit motive is an important piece of the engine of progress, and relying only on this other incentive structure would cause stagnation.