Yeah, I don't see the issue this developer has as a legitimate one. He's intentionally keeping his Mac off the internet for some reason, and yet wants to develop apps for distribution over the internet. Seems strange to me.

XCode 4.0 will be bundled with OS X Lion, just as 3.whatever came with Snow Leopard, and every version before had the tools on the install media. For now, XCode 4 is a paid upgrade ($5 via App Store, or via the $99 developer program) due to the accounting practices Apple has. This is in line with previous items they charged minimal amounts for, due to not recognizing revenue for the particular item as a "subscription".

Apple has shown no indications (yet) of locking down the Mac OS to allow only App Store apps. And I have a feeling they never will. The developer in question could keep maintaining his software with XCode 3.2 until the next OS X comes out, with no issues. XCode 3.2 will continue to make binaries that run on OS X 10.6, 10.5 and 10.4. And since he has an "impenetrable" machine, there is no way an Apple update could sneak something in.

This is the one thing that bothers me with some open source developers. They go so far with their religion that it ends up harming the very cause they claim to support. I see them as no different then the extreme evangelicals out there.