It's unclear to me if the licensing terms of TrueCrypt allow others to fork it even without the developer's permission, perhaps without the TrueCrypt name?
Resources were invested by some to audit the code. The developer is uninterested in letting the code go on. I think the lesson is, don't invest significant resources in supporting a shared codebase, unless it's got a license that will let people continue to use/develop the codebase even without the original developer/owner's permission.
No, they don't. You're allowed to inspect the source code for any reason, but the license does not allow redistribution or modification. TrueCrypt is not open source or free software.
I don't remember hearing that redistribution wasn't allowed, I'll admit I haven't read the license carefully, but what I understood was the original license forbade modifications through the advertising clause (making it incompatible with open-source licenses):
If you take and modify the source, you must remove all references to the "TrueCrypt" name inside of the source code and program interface and not call it TrueCrypt. If you redistribute it unmodified, you must leave the "TrueCrypt" name intact. I don't have a source for the second term, but it would seem to be impossible to have an unmodified work that didn't call itself TrueCrypt -- by removing TrueCrypt branding, you fulfilled the terms of the first part, even if the functionality of the software was actually unchanged.
This is a funny thing about FOSS licenses, and I guess a commonly known thing about the advertising clause as it relates to FOSS licensing. The wording in the GPL that causes this situation I believe is: "No additional restrictions may be placed on the redistribution of either the original work or a derivative work."
The intent of the advertising clause is to assert and maintain control over the software in the hands of the creator/owner; this is fundamentally incompatible with FOSS ideology, where anyone can fork and edit, and the leadership of the project is "de-facto" as in the eyes of a community rather than "de-jure". That being said, it is annoying.
Resources were invested by some to audit the code. The developer is uninterested in letting the code go on. I think the lesson is, don't invest significant resources in supporting a shared codebase, unless it's got a license that will let people continue to use/develop the codebase even without the original developer/owner's permission.