I'm remaining optimistic. I do agree the days of free are soon over - however consumers will soon finally realize free isn't what it's used to be - and start actually paying for what they use in all areas (only if they are forced out of other options).
It still pays to have a large userbase and advertising eyes - and I would rather have that now and hold out until things get better. It may weed a few out and change the market - but that's the same way with anything that people start jumping in on - and only the tough and smart will pull through
My advice is don't drive yourself too nuts - just have some fun and eventually it will work out - because if you do things for the right reason which is supporting the users and helping people - rather than pound them with offers that they don't want- eventually you will get the loyalty and maybe they would be willing to pay for a decent service.