Correct me if I’m wrong, but their business model is using Oracle Linux in their cloud offerings.

Oracle Linux was created to undermine Red Hat profits to prevent Red Hat from competing with Oracle on acquisitions. They also sell their other products, including proprietary ones like Oracle DB, running on top of Oracle Linux.

But those (great) achievements were and are premised on community collaboration, and it’s more than fair to raise a stink about it.

If you value community collaboration, you should be pissed at the RHEL clones. They contribute extremely little, literally just enough to say that they contribute a non-zero amount. That's the stink you should be raising. The spirit of open source is collaboration. Taking the RHEL source code and just rebuilding without meaningfully contributing may be allowed by open source licenses, but it damn sure isn't in the spirit of open source.

That is to say, RHEL’s success is based on making it an open standard.

RHEL's success is based on using open source as a development model, not a business model. It has nothing to do with other distros claiming that RHEL is the standard they have to follow, instead of actually doing the work to be good distros in their own right.

Closing the downstream is a loophole out of this system where they get to profit.

Everyone can build off (and profit off of) the upstreams, including RHEL's immediate upstream CentOS. Red Hat has no obligation to allow people to duplicate their product exactly. Having a mature understanding of the separation of products and projects is a big factor in Red Hat's success.