This is an interesting debate, so I thought that I would add to it........
IMHO

Freeware is the lifeblood of FS. Its allows 'oldies' (perhaps on a fixed income) to continue to enjoy new FS experiences. At the same time it allows youngsters (with not much pocket money) to enter the FS community and help ensure that it continues to thrive.
And I am not forgeting those in between ;)
Payware is a natural consequence in a free society.
We all have a choice to use or not use freeware/payware ;D
So what are the issues?
Three spring to mind......................
Firstly, the lack of respect that a small minority of users show towards freeware developers. As a freeware developer myself, I can assure you that it is not funny to receive a rude email about your work ( and I dont mean genuine constructive criticism which is always welcome). Also, after spending many weeks on a project, to find that some-one copies it, makes a few minor changes, and then claims credit for your work! Fortunately, all decent FS sites do respect your copyright, but it still causes a hassle that is not fun.
Secondly, the improving quality of freeware has created a growing overlap with payware ie the best freeware is now consistently better than the worst payware. This might suggest that too many are now trying to make a quick buck?
Thirdly, some payware is becoming too highly priced. Whilst I have purchased a number of payware aircraft, I find that anything over around $20 is very hard to justify.
What do you think?
Cheers Paul 8)