The insight is, offering something for free isn't worth it. And why? Because free users cost more money than paying users when considering the headaches and work they cause.
You're twisting his words. While it's obvious that free users will inherently incur a net cost, it's not obvious that the actual per-user cost of a free user is higher than that of a paying user. The latter is still a very interesting observation.
Since when is offering a free services an excuse to steal from your clients afterwards?