I'm very sad to hear that Cloudron core code has become proprietary software. Like @ryangorley, I've always been promoting Cloudron as a great well-supported open source self-hosting option.
I too want you guys to succeed but I fail to see a valid reason to turn Cloudron into proprietary software if it is still being developed in the open.
My thoughts on the reasons you gave:
The technical reason is that the code base has subscription, appstore and sign up logic. It's unclear what the license should be if it requires the cloudron.io service to work.
I-am-not-a-lawyer but I'm pretty sure that you can still be under an open source license. I mean, the situation is not "ideal" as an user can't easily self-host without relying on the cloudron.io external service, but anyone is free to create a fork and reimplement these functions. Also, I don't know if it's the case anymore but we used to be able to install cloudron Docker packages built manually without cloudron.io. So in a way, Cloudron was self-hostable, just without the user friendly App Store.
The non-technical reason is that we were spending too much time explaining why we call ourselves opensource and charge for it.
It should be pretty simple for customers to understand, they are paying for a service of maintenance and support (indirectly funding the development of the core product). That is no different than let's say a WordPress maintenance service to have plugins/themes kept up-to-date by a company.
Worse case, if you really want to give proprietary software to some customers, why not dual-license? Contributions would be made under both AGPL and your proprietary license. This way, it's still open source and potential contributors would be a lot more inclined to become involved.
Anyway, I wish that a compromise can be found where Cloudron still remain a great open source self-hosting option!