Is SaaS legitimate open source?

The idea is that you use open source code, add your own proprietary bits to it, and then sell the resulting service without contributing your own code back. Google does this a lot.

There is a GPL dealing with online services, the Affero GPL. It is now being modified based on GPLv3.

Note, however, that Google doesn't use Affero. It predominantly uses Apache, and has done some GPL work, but no Affero.

Tim O'Reilly doesn't think any current license properly deals with online, Web 2.0 applications, and suggests the answer will come from something like the Wesabe Bill of Rights, which also includes personal rights to data contributed by users.

So today's question is this. Is the Web evolving too fast for the licenses? Can licenses catch up to deal with the demands of an online world? Or will Web 2.0, based on open source software, remain in effect "proprietary."

Discuss.