With the amount of money they had raised, the expectation from investors was that their flywheel would already be setup and working and new funding would accelerate it (Series A being the new Series B).
Media coverage of startups is all at the pointy end - companies that have raised money and are successful, most startups don't raise continuing rounds and the "Series A crunch" is real. The question should be inverted, why should Everpix get funded.
Despite having a product that was loved, was free, had good word of mouth and coverage etc. they still didn't get funded. Not a unique or unusual situation, and only covered in this case (as opposed to the startups that die out quietly) since the founder was willing to speak to a journalist about it.
Could it have worked with no funding, a leaner startup and as a paid product? Who knows, but I wouldn't use their freemium numbers to make that case.
[0] http://andrewchen.co/2013/11/05/when-a-great-product-hits-th...
False. I did it, and it worked fine.
http://cashboardapp.com/blog/2013/05/01/freelancer-plan-anno...
Now, do you actually have data, or are you just filling up the comment box with words?
Just the same, a single anecdote is the exact amount of "data" as the person you're responding to provided...
Reaching users is incredibly expensive (once you have the audience, you can charge others to access it - see how it works), conversion rates are low and consumers are reticent to spend.
By being free your product becomes your marketing. You either have a paid product and start paying $50-500 to acquire each user, or you have a free product and pay $0.05-10 to acquire each user.
You can't just cut out the free product part and magically retain the paid part, as this example does with Everpix.
There is also an element of network effects in a lot of consumer business models, with a winner-takes-all (or most) landgrab.
Things are entirely different in the enterprise sector, or selling to people at work.