I think a big part of it is that users/readers understandably feel that a bait-and-switch has happened. Because it has.
I really think the whole idea of "make it free at first, monetize later" is what's broken. If the intention is ultimately to have it generate revenue, the best thing to do is set up the revenue mechanism right from the start.
Agreed. Many people who have the means don't mind paying for things that bring them value, and they would much rather just pay for consistency than have that value eroded over time.
If you are competing with a bigger, better-funded fish, then the odds are very against you anyway as long as you're playing the same game as they are. Your real strength is to play a different game, one that leverages your unique strengths, not to meet them toe-to-toe in a game that leverages theirs. This can be done even if your product is in the same category as theirs.
Exactly how to do that is highly dependent on you, so very individual (which is part of why it's so effective).
It's more like, you're competing against another business on the same footing. Both of you have the option of taking VC investment, which comes with significant downside but will give you a bunch of money in the short term. If your thesis is that the better-funded competitor always wins then the answer is that you should always take the money; I'm not quite that pessimistic, but I do think this specific blitzscaling playbook is something to be aware of.
Or they can make the charging process and fees very clear, and give out free trials. Or, if the funding mechanism is to be ads, include them from day 1.
I really think the whole idea of "make it free at first, monetize later" is what's broken. If the intention is ultimately to have it generate revenue, the best thing to do is set up the revenue mechanism right from the start.