That doesn't make sense. Why would a service provider pay the open source developer when they can just get the code for free? There's no incentive there.

If you mean to suggest that the open source developer be the servive provider, they're still not being paid to write the software.

Plus, even if they enjoyed and were good at operations, marketing and customer support, they'd be put under by other service providers who can operate at a fraction of the cost since they're not contributing to the development efforts.