Well,they talk about not offering products for _consumer_ desktop Linux, not corporate. I think it's fairly clear that they're right, the only real money to be made in the consumer desktop space seems to be selling cheap PCs with Linux preinstalled, not selling Linux for users to install on their PCs (which probably came with some version of Windows installed anyway).
Particularly when you're competing against free distros like Ubuntu which are already aimed more at the consumer desktop market.
Jade, I'm going to have to disagree with you here. Pretty much the only people that could push a consumer desktop Linux either are, or have decided to not step into that ring. In order to make money with it, you'll need to make some decision on how to market it: if you go with a boxed copy, you can make money off of the CD's/DVD's, and include any proprietary components needed, as the cost of the box set should cover your license costs.
If you decide to offer it for free, you're looking at making money from support. This is a dicey proposition at best: it works great for many kinds of software, but not so well for the operating system (Linux especially)- you'd get calls from people about all sorts of issues, many of which aren't easy to solve, or at all (my hardware isn't supported, how do I play X file?, etc.)
The final way is through OEM sales. This is a good idea, but it requires you to be one of the "Big Guys" to sell to one of the big OEMS, which is where some of the money is. You could try selling to smaller whitebox OEMS, but they won't have anywhere near the volume of a larger one.
Whatever path you go, support is very likely your biggest problem: you'll need a trained call center staff, and unless I am hugely mistaken, Linux trained people just aren't as numerous as their Windows counterparts (and will probably cost you more to hire); also, less people are familiar with your choice of non-Windows/Mac OS, and so they will ask more questions of all sorts of levels, and as mentioned above, some of them may involve very technical tasks, or things that the user is simply not capable of doing.
So it is possible, but due to the costs involved currently, it's not a very feasible idea but if you have hundreds of millions of dollars to throw around and have no shareholders to be accountable to, go for it.
I always thought Redhat said this because they cannot compete with Ubuntu (in desktop market).
Desktop and portable.