Matt Cutts wrote that it works like if I would be bidding with an empty ad, but Google ad system works by CPC, so actually the product should be free in theory :)
Google exactly knows my long term value, so it could ask for that amount of money. Also it's for AdSense / DoubleClick, not for Google.com, where ads matter the most.
Asking for your "long term value" is interesting, although for users who run ad blockers and therefore never click an ad, isn't their value super low anyway? Imagine Google asking for $50/yr to not show ads, installing an ad blocker, then a year later seeing Google ask $5/yr as your value plummets.
It could just use my interests to predict how much I'm willing to pay for getting rid of ads.
Or even the type and number of devices that I'm using Google on should be a good enough predictor, or just the country (which is the case for Youtube Premium).