We had seven projects in DARPA POSH and one in IDEA. DARPA did not fund a single one of them. I'm afraid it's because they think we will self exploit ourselves like always and develop that stuff "for free" anyways. 1/4
Or is the issue that they don't need to ship it or modified versions, just use it in-house & ship the output?
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Excluding certain types of applications or users is a violation of the open source definition. So I wouldn't (couldn't) call it open source anymore of course.
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You can make odious without excluding just by being incompatible with their business or deployment model. For example GPL works this way with game industry.
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That doesn't work here. (It might work for some cases, but the big one is research where often the only deliverables are scientific papers, not code or installable binaries.)
End of conversation
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