The thing for me is that neither the razor blade model nor the subscription model fit my actual use of the product. For me a printer is essentially a piece of infrastructure. It's not the kind of thing I upgrade or want to pay any attention to. I buy one, set it up, and basically run it until it dies or falls out of support. I only replace them when I absolutely have to, and I would prefer that to be as infrequent as possible.
I'm willing to pay for something that fits that model. Charge me the real cost for the physical printer - including R&D and ongoing support - and in turn come back down to reality on the consumables.
I'm saddened that no one can make this model work, but I understand why. Very few people are going to want to go from $100 printers to $500 printers. Though, as the world becomes more paperless I can see this occurring in the long tail - "Hey, buy a printer. Never know when you'll need it and it's going to last you."