Donate buttons are complicated and require you to make all those decisions. With Flattr you have to decide once how much you would like to give per month and that’s that. One decisions and you can click away. It’s hassle free.
I don’t think we know why people don’t like donate buttons and your hypothesis (“People don't like paying for stuff they can have for free.”) might be wrong. Maybe all that’s needed is making donating easier. Maybe not.
The simplicity is the entire point. "More flexible" == more complicated, and then I won't want to use it anymore.
I think a really innovative approach would be a pledge/rescind model. Let people freely pledge up front up to a certain liberal limit then present them with the registration, payment, tedious paperwork all at once after the fact. Let them welsh out on as many pledges as they want. What is a pledge that is later rescinded worth? Less than a penny obviously but more than nothing at all. I think most people would willingly agree to follow through on their donations even with given the opportunity to back out, if the details weren't too burdensome at the outset.
The problem with every microcurrency scheme I've come across is that it enforces the kind of rigid transactional exchanges that fit traditional commerce models when, with a little imagination, they could do very interesting things with the networking and computational possibilities available through the internet.