DHH nails it on the head with this one. SaaS is not the right model for everything, but it became that because “that's the way to do it”. Recurring revenue, yes please! But as we found out there's not a lot of people willing to subscribe for a non-essential piece of software.
Back when I got started with computers, all software was assumed finished once it was put on a floppy disk or CD. You literally burnt the bits into a hard surface, and they weren’t going to magically change after that.
This is why I'm excited about 37Signals' Once program. I personally need it to succeed, in order to prove to the world that there's a different way to monetize software. Paradoxically, it's the one we moved away from.