I think shimfish is talking more about a market's willingness to pay, which is a very different consideration. You can absolutely poison an otherwise viable marketplace by setting the buyer expectation to be free.
I think "reluctance to spend money on apps" is a big problem on Google Play outside of the population that must chose between a $5 app and food on the table. I've just seen a lot of grumbling among even affluent people about dropping a few dollars on an app when they'll easily spend 3x as much on a single drink. That's a problem in the perception of value.
I wonder if app prices could be more on a sliding scale by geography? Has that been tried?