I understand your perspective, but: the OP stated that he only sold the app for .99 cents before making it free during the summer. So 2 of 7 months before becoming free. But apps usually get at least 10x more downloads when free. So to calculate what percentage of his user base might be affected by the additions of ads when they have already paid: 2 / (2 + (10 * 5)) = 3.8% of his user base. That's his historical user base, not his retained user that is still using the app. OP's estimate for user retention is 3%. The number of his total users that will be affected is: 3% of 3.8%. 0.11%. If this app was downloaded 10,000 times since launch we are talking about 11 people - half of which have already posted their negative reviews to iTunes and the other half... doesn't really care either way.
As an app developer myself, I do care about my users. If a significant number of people will be negatively affected by a change I'm considering, I simply won't do it. It's just about where you draw the line. Is your stance that if even one person is affected in this way then it is unacceptable to make the business decision to shift to ads?
I completely disagree with this. It might work as a business decision but it could cause problems in the future, especially if these early paying customers are vocal or previously bought your other apps. I think if a more popular/downloaded app did this (thrusting ads on paying customers) the backlash would be huge and it would severely damage the companies reputation. Just because you are a smaller business less likely to get press coverage for a bad decision doesn't give you a free pass to make it anyway.