It's a complete and balanced ecosystem. If this particular VC starts funding only paid services (and started an industry wide trend), there will be an opening for free services to take on the funded/paid startups. This post really means nothing to the average startup founder, some services as tialys points out will never work with a paid model (Facebook, Google, Twitter etc.)

I do think the days of "shit"-free-mium services are over, I.e. forums that are turned static and filled with ads.

Also... some services wouldn't make sense to pay for. I wouldn't pay for Facebook or anything in that space.