"But it seems to me that this is where the Fallacy Of Composition comes in... But by the same token, those services can be easily replicated, according to investors..."
The author never makes clear the connection between F/OSS and the fallacy of compostion. The piece wants to address the latter as it applies (or does not) to F/OSS, and this example appears to be the case in point. But it fails as such.
There's nothing inherently or necessarily F/OSS about "Web 2.0" applications. As in any other class of application, a "Web 2.0" one may or may not provide source code and rights to that code.
And the ability of a competitor to replicate a product or service is about the emulation of an idea, not source-code rights. I too can open a pizza joint to compete with the one down the street that's doing so well. I can even try to make my pies as much like the other joint's as possible. But that doesn't imply that joint #1 is showing me their recipes.
I have to ask, what does this article say?