Are VC's killing innovation?

I’m blogging from the Open Source Content Management conference in Berkeley today. It’s clear that smart people are working hard to create the next generation of content management platforms–and publishers from bloggers to AOL/TW are going to benefit.
The speaker from Zope (an American based in Europe) raised the question: “Why is all the open source content management development based in Europe?”
A lot of people suggested it had to do with a more open-source-friendly environment or fear and loathing of Microsoft.
My own suggestion: There’s not a lot of venture capital to take these projects private. In the nineties, a lot of Europeans saw this as a detriment to the development of an IT or Internet industry. Now, the ability of VC’s to remove assets from the commons forever (even if the companies created ultimately fail) looks like a mixed blessing at best. Is our current intellectual property regime really the best way to foster innovation?