the reason we make sure all our products are gross margin positive is so this doesn't have to happen.

Your $5 plan may be gross margin positive but incentives are to push users into higher margin plans and from this pov this new plan looks much like your previous free plan which was rug pulled. Offering a free service to buy users then imposing migration costs on these users when you rug pull damaged your reputation. Next time perhaps grandfather existing users instead. If you want this new plan to be taken seriously update your terms to promise you will not rug pull again.

Do you intend to sell to people with one brain half or how should I interpret this argument?

This is a lazy response.