I don't think this view matches reality. For example, imagine that I fork and modify some GPL'ed software and only distribute it within my company (or just use it myself). I'm not required to distribute source to anyone other than the users of my modified program, so (to use your term) I have "enslaved" my version of the software. I think it's clear that "free software" refers to the freedom of the users of that software.

(disclaimer: I am not an advocate of the "free software" moniker/agenda although I happily use and contribute to open source software and don't object to judicious use of the GPL.)

You are right, but I still find this imperfect analogy the best way to 'explain' why the FSF would attach the adjective 'free' to 'software'.

I also wonder what the FSF's response would be if such "within one's organization" use ever would become the predominant way some commercial entity used some GPL software package. I think they would classify that as a hole that needs fixing.

Edit: of course, I may be overlooking that such cases already exist, or that the FSF discussed this (I did browse the GPL FAQ to check the latter, but did not spell it out)

As a side note -- can anyone here shed light as to what the GPL says with regard to developing code based on the GPL within your organization? I mean, I would want my employees to NOT necessarily go and publish intermediate stages to the world or share them with my competitors. But then again, I am restricting my employees' freedom to do so, through a non-compete contract or something else. Is this compatible with the GPL? I guess this hinges on whether the employee installing a copy of the code in their development environment counts as "distribution". Does it?