I think your commingling two different subjects.
1. Legal conditions of the licence, does it give everyone the 'right' to copy the design? If yes, then
it is open source hardware in my opinion.
2. Ease of replication, does it provide all the information to make copying easier? This item doesn't
define if it's open source or not, just how much effort one needs to put forth to replicate the design.
I think the products that fell into that close/open product usually don't state their license. But, if let's say the product is a derivatives of an Arduino or product complementing Arduino, it does need to follow the same licensing right?
I understand your idea about "spirit". IMHO the schematics are more important than the CAD files. What exactly would you mean with "better" products if you rule out "cheaper" as an improvement?
A good example of better product would be the Seeeduino. It's a derivatives work and it still inherits all the open spirit of the original works.
Just for the sake of argument. Would you consider my Blinkenlight Shield https://shop.ruggedcircuits.com/index.php?main_page=product_info&cPath=4&products_id=47
? Would you consider my documentation http://www.blinkenlight.net
detrimental or helpful?
My hope is that it will promote the community. Still I would consider my license terms (CC BY-NC-SA) not exactly open source. My choice of license is exactly designed to avoid what you describe. If I would make it completely open I would have to accept what you describe. This way there are still loopholes but at least I have a slim theoretical chance to avoid commercial exploitation by others.
If I would make it completely open source I would have to accept that others can and probably will exploit it.
What do you think?
That is some really awesome work! I would still consider your work as very open in this case (although with the missing CAD files or I might miss them on your website). I understand your fear of being ripped off but with the amount of support you are giving (the documentation, samples sketches, and even the experience process), I'm sure that even if there's someone that wants to copy your work and sell them, the community will still get yours in my opinion.