Not all app need to show ether to the user, but that is the currency used to pay miners for transaction fees. There are ways in which the app developer can try to abstract the concept of ether using other currency, or even subsidising the users by paying their cost via other means (like what digix gold does).
Ether is not used as a reward for hosting the app, but for changing saving data and changing states on the blockchain. We will have a P2P solution where users are paid to host actual application files.
As for downloading the entire blockchain, light chain verification will make this unnecessary.
You'd be better off using IPFS and integrating the storage/frontend so it communicates with your backend cluster. That would keep you off of ethereum.
It is 'pay-to-play', but the cost is often minimal (half a cent per transaction), nothing is really free either, when one uses something like facebook one is paying indirectly one way or another (though personal information, seeing ads, etc..)
It is migrating away from a free web to something that is purchased on every page. And given that bandwidth and storage are getting cheaper and cheaper, that system is a travesty.
And not to mention, when big mistakes like what the DAO did, mommy and daddy (Ethereum) will make it all good.
Not all applications running in these sort of platforms need to be about money either, and "mistakes" like the one in the dao happen can happen in all software, it can be coded as centralized or as decentralized in terms of management as you wish, the key difference though is that the platform itself is decentralized.
Additionally, in the Serenity phase of Ethereum contracts will be able to pay for transactions, which effectively makes transactions free if you like that sort of model, is that something that would make you happier torwards Ethereum and other decentralized systems?