Scenario: you have two competing products. One is fully developed "in the open" (online Trac, open mailing lists, etc); the other is 100% closed (main bugtracker/dev lists are "behind the firewall", no public nightly builds, etc). What does it happen when you introduce a new feature?
In the closed case, nobody will know. You can plan a big Steve-Jobs-like demo, or disseminate distracting rumours (and send competitors up the hills); as long as you can avoid leaks, you are in control.
With an "open" project, in a few minutes the word will be out. You can hide things in a wiki or a bugtracker, but version control checkins will "fess up" pretty fast (you could deliberately put in blank or disguised comments, but that would irremediably pollute your repository). Competitors will start efforts to match the feature, and your competitive advantage might be gone even before you had time to exploit it.
The element of surprise, with an open project, is not available. This might or might not be a big deal.
Personally, I'm finding it a bit of a nuisance, since I have a couple of new features in the pipeline for my little apps which, I hope, will be seen as fairly innovative for this sort of tools.
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