This is idealism.
The reality is Pulumi's providers have no value for Terraform, which already built and curated its own ecosystem after years of time and effort. Then, Pulumi can spin up a directly competing product in a fraction of the time by reusing all of that work. So I understand the motivation for the license change.
Circling back to your original comment which spawned this thread:
> Like, has anyone of any significance used a Hashicorp product to meaningfully compete with Hashicorp?
The answer is unequivocally "yes". Pulumi has. And Pulumi can continue to do so, apparently. Terraform providers continue to be MPL-licensed.
Another example I learned of was IBM Cloud Secrets Manager, which is basically reselling Vault: https://www.ibm.com/cloud/secrets-manager
With IBM Cloud® Secrets Manager, you can create secrets dynamically and lease them to applications while you control access from a single location. Built on open source HashiCorp Vault, Secrets Manager helps you get the data isolation of a dedicated environment with the benefits of a public cloud.