Due to network effects, it makes very much sense to let frequent users ride freely (perhaps not bandwidth hogs, but frequent communicators with multiple friends), as they'll bring in and keep many other users in the system.

I use it every day and I got my free account expiration date upgraded to "lifetime". Admittedly, I'm a light user regarding bandwidth usage; I do share some pictures, but probably a lot less than the average user. I honestly don't think I know anyone who pays the annual fee.

I'm an extremely heavy user, hundreds to thousands of messages and images per day, and I've had the same messages so I think it's the heavy users that they're allowing for free.