UDK was free on PC but cost money on the at the time new mobile platforms, I don't remember exactly why but I think it had to do with the middleware used, there would be new licensing agreements for the new super hot platforms. Unity was always cheap on PC but like UDK the mobile version really bumped the price, initially, with time that eased up and the basic version is now free for iOS and Android, same with UE4 and that one includes full source code. So something has changed over the years.
UDK doesn't include any source code for UE3 though, that's pure Wu hyperbole. Not that UDK is bad if the developers are competent, here's one of the dudes behind Hawken talking about it, it's from Epic's own site so it is a puff piece but it clearly points out that Wu is full of bullshit:
When it comes to working with UDK instead of the full source code version of Unreal Engine 3, Le and his team were impressed with UDK’s flexibility in spite of early concern.
...
And while the team was somewhat skeptical about using only UDK and UnrealScript, that changed through the course of development.
The UE3 license with the full source code included started at ten times what Frank paid. Wu's own words when deciding on an engine was "let's go with the most expensive one!" which is standard behavior for him - except they didn't have 300k+.
The Unreal engine expert also managed this for the PC release:
The executable for the game is called UDK.exe with the default UDK icon and the process is called UDKGame. Sad!
The full UnrealScript code for Rev60 is right there in the release, with comments and notes. "for baby wrangling" is one comment and is connected to showing credits, don't know what that's about.
Most of the code looks like this.

It just fires off animations.
This is the type of super-advanced Kismet, the node based scripting language he's talking about, taken direct from one of the levels.
The whole level in its entirety(R60_Mon_map)
Zoom in and it looks like this.
Unreal expert Wu couldn't figure out what the system requirements was on PC and only provided minimum requirements with the added note "The minimum specs are set by Unreal Engine 3, not GSX. Please follow their guidelines. "