"So, when I come out with my new and improved product, I should, instead of selling it, let everyone have my previous product for free???"

Why "instead"? Especially in case the target markets don't overlap,
You know that about other peoples business?? Above it is stated that any business should do so.

and in case there is still (even small) demand for the old product. You don't want to give it away? Then sell it. If the old product, sold, cuts into market share of your "new and improved" product, you should definitely rethink the "news and improvements". Trying to force the new product upon your customers (while they would prefer the old one, but you just made it unavailable) is definitely evil.
There is, and I am still selling it to those that want it (to keep all units identical). however the postulate above was that it is "morally wrong" not to give it away and that is total crap.

But there's even more. I have an old Logitech scanner. Enough for me. But I don't have the drivers. And what I find out? "This product is obsolete, we don't provide any kind of support or drivers for it". I'm left with a piece of useless crap. Now I know I need to buy a new scanner. But one thing I know for sure is, it won't be from Logitech. Nor any device that would require drivers. Simply because I don't want to find myself in the same situation in 3 years.
I try to stick to a 5 year standard for my suppliers, if they drop support before 5 years, they get blacklisted. It is, however, not reasonable to expect suppliers to support stuff for eternity.

Announcing "end of life" of a product is a very dangerous step that may cost you a lot.
The judgement there must be what cost the most, keep supporting or drop it.

"If you can guarantee me that a student I give something to will NEVER use it for commercial purposes and NEVER give it to someone else, I am sure you can also guarantee me that the moon is made of green cheese."
I can't, mainly because if you give something to a student, you can't be sure he won't make a moon of green cheese with it. Creative bunch, they are. But I can guarantee you that with proper strategy you can make more profit by giving things away to students than by not giving them. At least in a way that if you provide them with a limited, educational version now, they are more likely to purchase a full version later, when they really need it and see direct profit from purchasing and using it. If you don't, they will get a cracked full version now, and won't even think about paying you until they feel the breath of the Police on their necks.
Did I say anything about giving away evals?, I think that is a great idea. The problem there is that they are unusable for eveluation.

Erik