Ideally these things should be subsidized or at least run on generous donations, yes. But quality matters most to me. I'd happily pay for educational software that is proven to be better (more engaging, more fun, better learning outcomes) than free & open-source alternatives.
As a former child who had his mind blown by the utter magic that my parents' Windows 3.11 and then Windows 95 machines had, no: I want real software I can play and learn the ins-and-outs with. I want games that are made with care for the children who play them (Oregon Trail, Math Blasters, JumpStart series, etc.)
Whether it's paid or libre is irrelevant, kids literally don't care about Adult(tm) concepts like that.
I'm at the stage where I'm trying to get my kids into tech based "building", I'm a software engineer so want to start teaching them to write code asap, but don't want to start their computer journey there.
I had a click through of this out of interest; by the time I'd picked a colour for my avatar (awful gaudy colour combinations), read the half-dozen tutorial tool-tips just to get the the main ring, I was already bored stiff, as an adult with an almost limitless concentration span.
I hate to say it, but I can't imagine my children wanting to use this as it's presented, at any age.
My kid loves the maze activity. It actually is a lot of fun to her. While I will concede that many Sugar activities lean towards the ugly side (usually when images are involved), fun things don't need to be drenched in gaudy colors to be accessible to children.
I think it’s incredible that people are volunteering their time to create open source learning software.
I hope it’s extensible enough to incorporate paid content. IMHO anything less can compete for attention in today’s attention economy.