I think you are misinterpreting Dancey's ideas. Primarily because I recall Mr Dancey claiming that by allowing different d20 games other than D&D would grow the entire RPG pie.
That's not quite what I remember him saying - his talk of "network externalities" tended to refer to variant settings rather than variant mechanics, as far as I recall - he seemed to hope that mechanics would become unified around the market's preferred alternatives, without canvassing that the market might prefer a diversity of mechanics. But I didn't read everything he wrote on the topic, so I might be reading too much into those things I did read.
Last I checked, there weren't a lot of variant SRDs.
Off the top of my head, here's a list: Arcana Unearthed/Evolved, Conan OGL, Iron Heroes, WoW. Everquest also, I think. It's probably a stretch to put True20 and C&C under this label, but maybe not a big stretch.
How does cleverly using 3PP OGC in one's product compromise its own sale?
I never suggested that it did. But the notion that the 3pps were a great design and dvelopment service for WoTC of which WoTC never took rational advantage is (in my view) not all that plausible.
Even the notion that it gave a high degree of support for designers/developers to poach is not all that plausible either. As I think I noted above, TSR was able to take Monte Cook from ICE, which is really no different to WoTC taking Mearls from Malhavoc.
The GSL makes the sandbox feel uninviting.
Well, obviously that's a matter of opinion. Goodman and Expeditious Retreat didn't agree. And it's being revised. If WoTC didn't want 3pps, they wouldn't faff around with a licence. The suggestion that the GSL is a big ploy to hose 3pps is worse than nonsense, in my opinion.
Corjay said:
they didn't create the GSL just to be rejected.
Utterly agreed. That this even has to be said shows that something is wrong with the whole GSL debate.
Corjay said:
I think he meant variant OGL's
Actually I meant "variants of the d20 SRD" - that is, new games which are variations on D&D. I've listed some above. These games proved to be quite popular. I don't think that Dancey anticipated or intended this. He wanted uniform mechanics (perhaps with supplements, but not variations) to support multiple settings and genres. My view is that the market has shown that it rejects this notion. Even within the roughly simulationist segment of the market, different mechanics support different simulations (eg Arcana Unearthed magic system vs Iron Heroes magic system). In may view, this is Forge 1-Dancey 0. Which is not to say that Dancey was wrong about other things - just this thing.