That is another very good point. Arguing that the free licenses for students will not expire is a red herring. This means that the teaching materials and IP developed at the university can not be used by non University members unless they buy an expensive software license.
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No, FOSS vanishes when core people leave, the software no longer advances, and people stop using it. This happens quite a bit. It's a fair comparison.
Even after the core people leave you can still build and use the old software. You can archive the software and use it forever on any machine. Try reproducing anything done with XST today ten to twenty years from now and you'll see exactly what I mean.