A: Yes. For widely used open source projects bug fixes and feature additions are generally added more quickly than in propietary development environments. For specialized software, fixes and feature additions can be hired out which is much the same as paying the proprietary software vendor to make changes except you have the added benefit of a large number of testers and the possiblity of spreading the cost amoungst many users.
Q: Why would OSS be a reliable and powerful alternative to proprietary software when there is no one company directly responsible for its creation and maintenance?
A: The people working on OSS projects are generally users or working for companies who use the software. They are typically responsible for the software in production environments where it has to work 24/7. Each developer has a vested interest in the quality and stability of the software and it shows in the software that is produced. This idea seems counter intuitive to most people used to traditional forms of business but the model has proven itself.
Q: Should we be teaching our children that OSS is good when, by its nature, no one can make money at developing it? Should we be teaching our children that OSS is moral when it takes jobs away from the software industry?
A: This argument is similar to, "We need lots of programmers because programmers pay taxes". The software industry is not a make work project. If our society can produce most of the software it needs better, faster, and cheaper through Open Source development then it is better for it to do so. I make money developing OSS, as do many others. There will always be a need in the world for specialized software development in cases where, such as where I work, the output of the software serves one very specific purpose for a limited number of parties. We always provide the source code to the software we develop. The companies we develop for demand it because they know it is the only way for them to have control over what they purchase. In cases where a piece of software can be used by many people or companies a small investment from each of the parties is the fastest, cheapest and best way to develop software and OSS provides the means to this type of development.