Now, as I understand it, it's unfortunate that much of the competitive edge nvidia's hardware has is actually the result of the proprietary code in their drivers. It's going to be hard to convince them to forego that, since it would endanger their cash flow.
Why don't they separate the parts of the driver from each other then? Keep the parts which represent their "competitive edge" closed, and at least open up the OS interface portion, which is almost certainly where most of the problems users have with them will lie.