> Ok, so why isn't there an option to just buy the thing at its actual cost without the subsidy and without ads? Are they unable to put a $ value on how much the ads will garner them over, say, a 3-year period?

That's the classical problem with ad-free subscription models: You remove all the people with cash to spare from your advertising pool, thus decreasing its value. At that point you might as well make the product ad-free for the people not paying as well.