This. You can charge for distribution, for compilation, for building, for packaging, for support, etc. BUT, the sources should be free, available and you should be able to fork it and modify it as you please.
Many people failed to realize the definition of Free OS in linux is "Freedom" and not "Free of Charge". You CAN sell linux for a price, but you have to provide the source code to your customer as well so that he/she has the freedom to do whatever he/she likes with it without any limitation. That makes you truly "own" the software.
When you're buying a Microsoft's product, you DON'T own it, you are just buying the "rights" to use the software.
Its pretty much what Oracle did, they grabbed Red Hat sources, made a few changes of their own in the kernel, and released it as a different product.
Its fine and falls under the fundamental freedoms of "free as in freedom" software, not "free as in free of charge". If you ever listened someone talking about the FSF and open source software, its probably the 2nd if not the 1st thing they mention.