Etherpad was completely unmaintainable when it was shut down as a service and open-sourced. Its first, open-source major rewrite (etherpad-lite) didn't work. It took a second major rewrite by a profit-motivated startup (Hackpad) to become useful again.
I think that if Etherpad had been GPLed, we would still have nothing but etherpad-lite, and we would lament Etherpad as a lost technology.
I'm curious what you mean when you say etherpad-lite "didn't work". I use it fairly regularly and while I'll agree it's not nearly as refined as Hackpad, it seems to basically function.
(Note that I'm not debating the GPL point. I don't personally think Hackpad's forking the code has had any meaningful effect on etherpad-lite's popularity; there are plenty of collaborative document editors out there.)
Wrong. The current Etherpad open source project and what you mean are not the same. The first one is the predecessor of Google Wave Java based product, and the current one "Etherpad Lite" is a JavaScript & Node.js based open source project - a reimplementation, possible as Google open sourced the original Java code.