100% agree on the ad angle. Ads normalised using digital products/services by paying with data and attention.
That is one of the reasons why I would love to see - reasonably priced - paid services, or even have governments offer them (as in: Source is open, hosting is being paid by the government). Given the role social media, the internet and so on plays today, it might make sense to treat this as a common good.
But that side track aside; I think that privacy respecting, ad free products can be offered for cheap, if their goal is only to finance themselves, development and gain a small margin. And true, network effects / buyin is real, but I also think that the market for ad-free digital spaces/services will continue to grow, as hopefully people become more and more aware of how precious and limited their attention really is.