Surely the total revenue from paying customers, relative to the cost of providing service to all users, is what matters^? If so, then this is ultimately a function of the percentage of paying users to free users (assuming cost of servicing paying and free customers are largely similar).

The opening statement of the post, that people who want something for free won't think to pay for it, is something of a non-statement. That free users cost (as the post goes on to argue) is pretty much a given, but it still matters.

^Where (I assume) what matters is a profitable business.