I think the fear that makes them not want to just make it public domain is that the established digital mapping companies could just grab the data and give nothing in return.
Is this a bad thing? Since I currently can't buy a sat nav box that has OSM maps in it, and since the OSM data is in some ways better than what those boxes do have, it might actually be better for me if those companies (err, TomTom ???) were allowed to use the OSM data.