People will go on using open source OSs and libraries, SW, but not those under the GNU moniker. And while desktop linux is a niche it is important to have choices and that it works well with existing hardware.
Practicality outlives idealism and I'm glad the kernel developers see this (while worrying about its open source and free nature).
There are plenty of very widely used Linux distros using GNU software that include proprietary blobs. eg. Fedora, Debian, Ubuntu, SUSE, Arch, ... It's not an either-or.