It’s not that the elite groups are good or bad, it’s the desire to be in an elite group that leads to bad outcomes. Like how the root of all evil is the love of money, where money in itself isn’t bad, it’s the desire to possess it that is. Mainly because you start to focus on the means rather than the ends, and so end up in places you wouldn’t have wanted to end up in originally.
It’s about status. Being in with the cool kids etc. Elite groups aren’t inherently good or bad—they’re usually just those who are better at whatever is valued, or at least better at signaling that they are better at whatever is valued, depending on the group phase (the classic description being geeks, mops and sociopaths or Scott Alexander’s version). For many people, status is one of the most important things there are. And not just for instrumental reasons, but on a deep terminal level. You can argue that it’s an evolutionary instrumental goal, but for them status is a value in and of itself. From what I’ve read of your comments around here, I’m assuming that’s not true of you, especially as your last paragraph comes to the same conclusion as Lewis does.
People for whom status is so important are easy to manipulate by promising them status. They’re willing to sacrifice other values for status gains. Basically Moloch and moral mazes on a personal level. So the best case scenario of chasing status just for the sake of status is that you spend lots of resources chasing a mirage, as there’s always another group with higher status that you haven’t yet joined. Unfortunately, many such status seekers want to join groups that tend towards immoral/illegal/etc. actions. So to join them, you have to jeopardize yourself. The Russian Kompromat system is a good example of how this works in practice. Or blackmail schemes, where you get the target to do worse and worse things to avoid leaking the previous action. Most inner circles are not that blatant, of course. The problem is that if you value joining such inner circles more than your other values, then there will probably be points where you have to choose between the two, and too many people prefer to sacrifice their other values on Moloch’s alter.
A bit of nitpicking: the basic Open Source deal is not that you can do what you want with the product. It’s that the source code should be available. The whole point of introducing open source as an idea was to allow coorporations etc. to give access to their source code without worrying so much about people doing what you’re describing. Deleting a “don’t do this bad thing” can be prosecuted as copyright infringement (if the whole license gets removed). This is what copyleft was invented for—to subvert copyright laws by using them to force companies to publish their code.
There are licenses like MIT which do what you’re describing. Others are less permissive, and e.g. only allow you to use the code in non-commercial projects, or stipulate that you have to send any fixes back to the original developer if you’re planning on distributing it. The GPL is a fun one, which requires any code that is derivative of it to also be open sourced.
Also, Open Source can very much be a source of liability, e.g. the SCO v. IBM case which was trying to get people to pay for linux (patent trolls being what they are) or Oracle vs Google, where Oracle (arguably also patent trolls) wanted Google to pay billions for use of the Java API (this ended up in the supreme court).