Your example proposition assumes the source code is available at no cost from the developer, which isn't necessarily the case.
It's true that nearly all GPL'ed (and FOSS) software is available for download at no cost. But there's nothing in a FOSS license which requires a vendor to have a no-cost distribution mechanism.
The "Selling Free Software" sales proposition is that you can pay to get the GPL'ed software directly from the developer, or find an existing customer willing to distribute it to you for free, or at a lower cost. The latter step may also require additional diligence as now you have two vendors in your supply chain.
It's true that nearly all GPL'ed (and FOSS) software is available for download at no cost. But there's nothing in a FOSS license which requires a vendor to have a no-cost distribution mechanism.
The "Selling Free Software" sales proposition is that you can pay to get the GPL'ed software directly from the developer, or find an existing customer willing to distribute it to you for free, or at a lower cost. The latter step may also require additional diligence as now you have two vendors in your supply chain.
That said, it's still a terrible business model.