It is preferable for users. Mostly they don't ever upgrade.
However, if you want to create an actual business, if you want to quit your day job, if you want to make a career out of this, then it's a good idea to start thinking about things from a business perspective.
I know this is HN, lover of all things free, a self-selecting group that treat tiny purchases like they're buying a house, but the key to building an actual functional sustainable business is to make business like decisions.
Part of that is pricing. Take something like this, where the price is completely arbitrary. Less than 10k for 2k users is $5 per user. If the product is $2 more then revenue jumps 40%.
One-and-done sales means you never get ahead. Every year is harder sales. Whereas Annual subscriptions means you build on a growing foundation. Conversely Upgrades just waste your time dreaming up features nobody wants or needs, and the market just gets smaller.
Sure, offering value to users is good. Offering value to customers is better. Making the business sustainable (so it exists even if 0 new sales) is the best model for both customers and the business.
So yeah, pricing matters.