Most developers cannot make a living selling premium games on mobile. There have been plenty of cost breakdowns posted to HN by game developers.
Occasionally a big mega-hit can make a profit, but for the majority of developers, free is now the only viable way.
I moved from doing code for industrial use and public admin as a consultant to mobile gaming.
We have one hit game and the _daily_ marketing (a.k.a. user acquisition) budget for us is an order of magnitude bigger than the biggest projects I did at my old job.
All the "ethical problems" usually are just older (usually) men in IT not understanding that people want to pay money to have fun.
Some people go to bars to relax after a work week and drop $100 gladly. Others use that for going to the movies, some go to have a nice dinner. And some people really like relaxing while playing games and they want to pay for that, because they think it's worth the price.
Fucking absurd, to be frank. Watch a GDC talk on growing mobile F2P revenue and you will be exposed to a slew of deceptive methods for psychologically manipulating players (who are often kids) into addictive spending habits, often literally through gambling mechanisms.
But games like Diablo Immortal, Genshin Impact and Honkai: Star Rail wouldn't keep their player base if they were just a 100% psychologically manipulative cash grabs.
If a game developer can make a living making "premium" games, then it makes sense to do so, especially with the very real ethical problems with making free-to-play games laden with microtransactions.
Just because you would only ever choose to do what makes you the most money possible, and damn the rest of the world, that doesn't mean everyone would or should make that choice.