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I'm getting kind of tired of this argument by anecdote kicked off by the Twitter not-so-smart bar. A lot of the examples have much more to do with acquisitions by big cos that neglected the services after purchase. Do we really have to run up a huge list of free services that have stayed entirely free to users and are still good (Yelp, Zillow, a million things from Google, Goodreads, IMDB, all the IM services) or that charged money and stink, have gotten worse or disappeared altogether (Mozy, Xdrive, MOBILEME, Gizmo)? Charging does not equal profitability and other revenue streams are available beyond directly dunning the user.

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