The freemium business model has three parts that require constant attention and modification: a) building a stream of new users, b) encouraging recurring activity of existing users, c) converting free users to the premium service.
The Freemium model is based on the economy of scale that has come to be with the internet age. There is a hunger for ever newer and more sophisticated apps. That makes the world go round. For now.
Somehow my gut feeling says we get too much for free. I could be wrong.