Yes. I understand. If by "distribution" a person means "the whole set of
software that a project distributes" - and, if one ignores the "psychological
line" drawn by the Debian project - then, yes - the final result, of a set
made of "free" and "non-free" repositories, is a "non-free" distribution.
It's a matter of if one recognizes the existence of such a dividing line,
then. :)
And, I guess that the "labelling problem", or the problem with recognizing
such a division, could then be solved, if the people at Debian just created a
separate entity, for the non-free repository, and hosted such repository in a
different server, with an address associated with that separate entity.
But, that wouldn't change anything, in practical terms. It would just be a
way of making that (already existent?) dividing line more evident. And, of
making everything more "formal". And, it would also just mean more
trouble/work for the people at Debian.
(Maybe, we could all just do Debian a favour, and recognize the existence of
such a dividing line, then?) ;)
(I'm sorry if this post ends up just adding more confusion. But, this is a
tricky and subtle issue, indeed...)
Anyway...
In the end, you win the debate.
In a final analysis, as it presently makes software available (or distributes
it), being the Debian distribution the source of such non-free software,
makes Debian (indeed) a "non-free" distro. And, the FSF is right, in not
including it in the list of approved ones.
(Although, I still praise, a lot, the people at the Debian project, for what
they're doing, in making more and more people adopt Free Software, within
possible.)