Early in the history of the Open Source movement, there were a small number of projects covered by the small number of licenses that met the criteria of the OSD. These licenses included the GNU General Public License, the BSD license (old and new varieties), the MIT license, the Mozilla Public License, and a few others. A goal of the OSI was to help expand the breadth and depth of Open Source software, and to that end the OSI encouraged companies, projects, and individuals writing software to consider using an Open Source license, or, if none seemed suitable but the idea of Open Source was, to submit a new license that satisfied the OSD while solving whatever problem made the existing licenses inappropriate.
Over the years, the OSI received hundreds of licenses, discussed all of them, and approved approximately 60. This explosion of choice in licensing reflected both the interest in Open Source as well as the many particular ways in which people wanted to create and or manage their Open Source software. Unfortunately, while all of these licenses provide the freedom to read, modify, and share source code, many of the licenses were legally incompatible with other free and open source licenses, seriously constraining the ways in which developers could innovate by combining rather than merely extending Open Source software.
Moreover, by inspection it was clear that some licenses were far more popular than others, leading to a wide range of possible innovations while other licenses were seldom, never, or no longer used by any active projects. These licenses served little purpose other than to steal attention from developers evaluating their choice of license for some new project.
It was impossible to know ahead of time which licenses would become popular and which would become less relevant. However, as believers in free market dynamics, we were happy to let the market decide.
In 2004, some of our consitutents requested that we clear out the licensing deadwood so as to make more room (and potentially ensure greater license compatibility) for the more popular licenses, and we agreed it was appropriate to do so. The OSI constituted a committee to study the issue and make recommends, which are now public.
In 2006, the OSI Board accepted the License Proliferation Report.