My feeling was that the lesson from this is don't go into a business if you don't have at least a vague idea how you're going to make money out of it.
I love XMarks and I'll absolutely miss it (and would have considered paying for it) but this would seem to be niaivity in the extreme.
That would seem to suggest that they might have thought about revenue a little earlier in the process and I have a feeling that with hindsight Mitch Kapor might agree.
So, the situation is this: we have a product lots of people want. The naive business model (freemium) won't work -- a simple back-of-the-envelope calculation shows that.
What do you do? Go forward building a very popular product and look for a business model, or quit because you can't think of how to make money from day 1?