Scrolling works OK on PCs because of spacebar/PgDn it is pretty stupid on touch devices. However, pagination, at least as implemented in Instapaper, is not without it's downsides. I sometimes have issues with pagination not being consistent (moving back and forth are sometimes not exact opposites).
Since I am viewing content without ads and want people to be able to continue to write I support Readability. I don't know that they deserve the 30% cut they take but there isn't really much competition out there. Flattr doesn't count in my book though it is similar.
One thing that I sorely miss in Instapaper though is the ability to mark text fragments and save them as quotes (like in iBooks for example), and add notes to it. I'm reading all these texts, and I can't mark quotes or note my thoughts. I hate it. Does Read It Later offer such a feature?