Well, a couple of reasons for it not being open source, really. Firstly, I don't really believe in open source software as a base premise. That's an ethos, and neither correct nor incorrect, but still the perspective I hold on this project. There's no reason for it to be open source, when it's actually regarded by the team as proprietory UKCT software.
Secondly, the software isn't coded in a common language. It's not VB or a C variant but in Blitz. I only know of one other active LFSer, that hasn't been involved in the coding of the X-System, but who has used the same language. The X-System wouldn't really benefit from open source exposure and would just undermine the proprietory nature of the system.
Lastly, LFS wouldn't benefit from more CTRA clones right now. Unfortunately the userbase is already at full stretch and another CTRA-type licencing system would just dilute the community further. When S2 gets the exposure that going Golden Master will bring, the upsurge in new players may make clones more feasible.. but even then, that won't necessarily mean that it would be in the best interests of UKCT, CTRA or the community at large to release the underlying code to open source.