I somewhat agree with Michael in that standards traditionally do not actively promote innovation competition, though a quick look at the Electronics industry would provide a little insight into the "Does Standards = Innovation and Competition" debate. The plugs and cables required to connect a modular audio system setup hasn't changed for many years. Though the introduction of 5.1 dolby surround sound, windows media centre technology and the digital transfer of audio and video, may require an updated in standards.
To coincide with Sergios comment "market acceptance is what declares the winning strategy" is definately, where the inclusion of a CD/RW drive in computers was initially innovative, and the cost of such devices within a prepackaged computer incurred a large cost 8+ years ago, innovation became industry standard. Try and find a computer that will only read a CD in todays market. I believe that it is that it is a cyclic process. Yes standards provide a level playing field for all those involved to particpate, but the Standards provided by the OGC allow for 'optional' features to be implemented. The purpose of those companies such as Google, Yahoo and Microsoft as well as the Open Source Community, is to experiment with whats possible, to provide new and innovative ways to solve the problems that may arise. The purpose of standards is to adopt the 'feasable solutions' that have become accepted by the marked place, and include them in the base standards.
Of course there is a point of saturation where base standards are at risk of becoming bloated, but that time is far away for the Online GIS community. After nearly 2 decades, it is comforting to see an evolutionary change that can provide a feasable, 'standards based' solution to interoperability. I agree that it doesn't seem to be a 'paradigm shift' due to GISs close ties with computing theory, rather a greatly accelerated step in evolution. I most definately agree with the concept of a Business Model Paradigm shift. The way the GIS industry does business in regards to data discovery and dissemination will most definately have to change to remain competitive.
Most good ideas do need encouragement....Bill Gates borrowed the 'windows' idea off the old early 80's (?) LISA (pre-mac) platform and convinced PC users it was a good idea! ;)