I beg to differ. It is possible to release the drivers as open source and include compiled versions of the S3TC libraries and so on, dependant on the license agreements for said libraries. One of the projects I have worked on is completely open source bar 3 compiled .so libraries for FreeBSD. It is still an open source project, and people can make changes and commit them to the source tree and so on. Further, the nature of open source does not rule out using license driven, closed source libraries within the program. I do think that this is something NVidia should consider.
Use it, don't use it