Another aspect of "the patch hole" is that by allowing such things you effectively preclude certain very legitimate forms of protection.
Consider the GNU GPL. The "GNU General Public License" is a "copyleft" license, designed to be applied to software source code. Summed up very succinctly, the GNU GPL (usually referred to just as the GPL) allows you to take GPL-licensed code and do nearly anything you want to it, including change it and further distribute it, except you must distribute copies of the modified source code to anyone who asks for it whom you have distributed the program to, and the source code must remain itself licensed under the GPL. In essence, this allows for the creation of a common pool of code that is Free, and must remain Free, preventing anyone from swooping in, grabbing some code, making a lot of proprietary changes to it, and profiting thereby without sharing the changes back to the community who created the foundation in the first place. For more information, please see the GPL FAQ.
The GPL is an unusual use of the copyright system, but a very legitimate one, and while many have questioned its validity, it is difficult (and some would say "impossible") to formulate an objection to the license that would not apply equally to all copyright-based licenses. Unlike many copyright-based licenses that restrict your rights, the GPL focuses on guaranteeing certain rights, subject to agreement to its conditions.
The Linux Kernel, the very core of Linux itself, is protected under the GPL. Now, suppose Microsoft decides to distribute a Linux kernel. Under the terms of the GPL, Microsoft can do so, but must provide the source code to the changes to anyone who has a copy of their changed kernel. This doesn't fit into their strategy, so they seek to bypass this requirement. Instead of creating a single file that contains the changed kernel directly, they compile a "clean" version of the kernel. They then make their changes, and compile a version of the kernel containing their changes. They then create a patch that converts the clean kernel to their changed kernel.
Suppose Microsoft now distributes this clean kernel and the patch. (In other words, they never directly distribute the modified kernel.) In the process of installing the Microsoft product, the installation program dynamically combines the pristine kernel and the patch on the user's system to produce a copy of the Microsoft modified kernel. With sufficiently clever programming, the system can even do this in such a way that an actual copy of the modified kernel never actually exists anywhere all at once, only bits and pieces of it.
Linux hackers notice the inclusion of the Linux code and triumphantly demand that Microsoft distribute their source to the kernel. Microsoft does so by sending out a copy of the "pristine" kernel source, straight from the original kernel.org source code, declare they never distributed the modified kernel and are therefore not required to distribute the changes. Voila; one inconvenient license, patched around.
When you allow people to patch with "clean hands", you destroy all derivation-based protections afforded under traditional copyright, and still valid for concrete parts. Any derived work can be expressed as the original work(s) plus a patch. This destroys the GPL, many clauses of many software licenses, and a wide variety of established protections for messages of all kinds.
"Patching" is not an ethically neutral event. Follow the effects. Patching is effectively the same as distributing the final product.