One example: I purchased Rovio's Bad Piggies outright for a couple bucks way back when when there was the ad-supported version and the fully unlocked ad-free purchased alternative. Sure, my current version has all the features I originally paid for, but the experience has gone to shit.
The purchased version was a complete and ad-free game at the time. Now my version of it is filled with ads for their other games and "consumable" IAP options at damn near every pause screen, every menu and the loading screens because they made the game "free", which essentially downgraded my experience back to the free-to-play version they started with. I didn't lose any game mechanics, but I lost the ad-free experience I paid for.
I also thought it wouldn't be allowed, but apparently it is. If they just released a separate free version there'd be no problem.
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I can't tell how many CD's I bought in the early aught's right when a band I loved came out with a new album - only to see it in Target a few months later with several "previously unreleased" tracks on it as a bonus.
It drove me crazy since it happened so frequently.
Instead imagine that half the disc you originally bought turned out to be self-destructing ( http://news.bbc.co.uk/1/hi/magazine/3064327.stm ) but you can buy a re-release without the issue for a discount if you trade in the old disc.
I guess the developers reasoning is they can get as many suckers as possible to pay for the full game after initial launch, then after a couple of months they squeeze more money out of it by changing to a pay-to-win format which hugely increases their user base.
It's a disgraceful approach and I certainly won't deal ever again with any devs who do this. Unfortunately, such devs don't really get much shaming so they probably get away with it.