Both yes and no. Yes, people are donating more than buying and it's a bit different. No - I think that most people, no matter the OS, will go with free software as long as it fulfils their needs. After all, if you can have something for free, why pay for it? The answer: when the free stuff isn't good enough. Or the commercial stuff is somewhat unique. Or there is no free stuff to do something.

Whereas I agree that developing a commercial app with solely Linux in mind is shooting yourself in the foot, I wouldn't consider Linux a dead market. Linux ports of some good games or specialistic soft (CAD?) would definitely get some buyers - the question is dev cost vs. income.

Last, consider how many pirated Winderps are installed on computers. Some people won't pay for software no matter what.