And I have to say, tough cookies. Hackers could find flaws and vulnerabilities, because they need oh-so-much help. If anything, it gives geeks a chance to find and patch flaws or make workarounds.
This is why Open Source software is always going to end up being more secure and more stable than closed source. When something goes wrong, there's a user base of competent people who are going to fix it. Since the fix is for their own benefit, they're more willing to share the end-product for free.
Now, lets say this, let's say that MSquish decides to open its source. This does not mean Windows becomes free. They can still license it however they want, the just allow people to see the guts. Now, this might threaten their "trade-secrets" and people might try and steal that code and incorporate it other places- of course, that will still be illegal. And considering the piracy rate they suffer, I doubt it'd be much worse.
They could even set the license up so that they get some control over the patches users write, and prevent forking in the Windows environment.
And it gives Windows competitors an edge? How? What other competitors does Windows have? *nix and Mac/OS (which is also a *nix). You mean to tell me that a *nix user is going to go and incorporate Windows code into *nix? Mind you, I wouldn't mind seeing the .NET platform ported over, but other than that... why? I fail to see any gain from it.