Upon reaching competitive level (level 30), you must have won a descent enough amount of free points (IP, as opposed to RP that one gets only by paying) to have a bunch of champions with appropriate runes. I think it is not really a problem, because you need to master the champions you play anyway to have some fun and win games.
Then, if one really enjoys the game, one plays just for the fun and IPs can stack up without you noticing.
The IP boosts thing is actually not a good idea: you reach higher levels artificially, without gaining real experience with the game and the champions you play. If you go straight to ranked games at level 30 by this mean, your ELO will probably be very poor; you'll be flamed by your team for your poor play, and that's a really bad experience (you'll have to learn to ignore clueless flamers though).
It should also be noted that Riot is not very greedy: sometimes you get free IP boosts, and even free RP (not enough to immediately buy something though - well played). And upon a recent server incident they refunded me RPs without asking questions - even though they could see I never bought anything from them.
The only things one cannot get just by playing are skins (custom outfits for the characters). As strange as it seems to me, it is actually the first thing that some players buy - instead of things that would improve their character's stats.
It seems to me that it works in a similar way as shareware games works. I also think it is an interesting response to the problem of piracy. See for instance Blizzard with Starcraft 2, who apparently refuse to offer LAN mode just because of that.