I don’t think Butterick is claiming SaaS doesn’t exist. He’s setting boundary cases for an economic argument about distributed software. SaaS isn’t an endpoint in that model; it sits in the middle, alongside subscriptions and licenses, where some form of leakage or unauthorized use still occurs.

I think they define selling software as selling a file that people download. Which is a pretty reasonable definition to me. With SaaS you are selling access to your servers.