The twist here is that StackOverflow is its own company (of which Joel is a founder) and StackExchange is a product of Fog Creek, currently available to everyone. If their pitch to VCs is "we can add sites for XYZ topics" what's preventing a competitor in that vertical starting up a StackExchange site on the same topic?

Nothing. It's not so hard to code, either, if you have time. That's why it's a land rush.

In this land rush you offer would-be competitors a turnkey solution to compete with you. So hypothetically let's say you were going to get into Automotive or Cooking Q&A and Car & Driver (or Cook's Illustrated) sees you get a little bit of traction and they sign up for StackExchange and heavily promote it faster and probably more effectively than you can since they have a dedicated core audience. This doesn't worry you? Or are you going to avoid verticals you can't quickly get a critical mass in?

Seems like a nice position to be in, actually.

Either you get a successful site in that vertical, or somebody else pays you $50k/year for the right to have it instead.

If this is intentional, that's an interesting idea. Once the concept is out there, it is a lot easier for someone to role their own competition. If there is going to be competition anyway, have some control and/or a stake in success.

If a site gets to the point where it is a substantial business, they may well want to partner with Stackoverflow more closely anyway to get features, advice, access to whatever revenue generating plan they come up with.