In many of these posts, assumptions are made about what it means to make an OS into a "public service." It's suggested that:
1. People would be prohibited by law to use any other operating system except the public one
2. Development of the public operating system would be restricted to an elite group of designers and engineers, selected by the government
3. The OS would be designed along a "one size fits all" plan, such that customization would either be impossible or discouraged, to ensure uniformity and stability.
4. The government would decide the objectives and goals for the project in more or less the same way that it decides which potholes to fix. It would then ram the result down everybody's throat.
I don't think that any of the above points follow from the suggested idea. Here are some alternate suggestions about how it might work:
1. The government would grant itself a perpetual license to freely use key patents and copyrights (possibly with compensation). Using these, an operating system would be developed with public money that would be free for anyone to use at will. No one would be required to use it, except maybe for government offices and contractors.
2. The OS would provide basic operating system functions specifically designed to interoperate well with components from private sources. Certain portions of it, perhaps, would be closed-source, but much of it would be open source so that good interoperability could be achieved. A key goal of the design process would be to create a framework that anyone could adapt to a specific task. Non-government programmers would NOT be thrown in jail. They would be invited to study the OS, and add to the body of available software.
3. Some leading academic, commercial, or engineering institution (maybe MIT, Lucent, or IBM) would be contracted to lead the effort. This contractor would be charged with building a consensus among those with a vested interest in the project.
4. The end product with be a set of standards and an official implementation of those standards, that does every basic thing that an operating system needs to do.
This is different from open source as it is today in that there would always be a single official version of the OS. It would always be simpler and cheaper to use the official implementation ("distro" if you will) if you possibly could. If there were alternate "flavors" of the base system, they would be clustered around very specific problems that needed to be solved. Microsoft and other vendors would concentrate on producing application software for the most important niche markets out there, to "plug the holes" in the base system.
Public money would go into furthering the system and public backing would encourage wide adoption. (Unless, of course, it was badly engineered, but I really don't see any reason to suppose that would be the case.) A broad swath of private firms would be free to invest in innovations, knowing that nearly everyone is using the same system and that new programs could be adapted to work well with that system quickly and surely.
Is this a good idea? I really don't know. Certainly, there are a number of drawbacks I didn't mention. But it's not nearly as bad as some are suggesting.