Not only that. The BSD license does nothing to prevent a competitor from grabbing your contributions and make a proprietary product with them.
Linux is a better target for companies like Canonical or Red Hat because of the GPL.
BTW, this is why Linux is a better target for companies like IBM, HP, SGI, Oracle and so on: because when they contribute something they can expect to get all other contributions in return. There is no such guarantee in BSD.
And yes. The AT&T lawsuit did not improve BSD's prospects a bit.
Also, Linux was appealing for hackers, as even today, it's harder to contribute to BSD, having a more centralized development methodology than Linux.