It's a classic shareware model and results in my willingness to pay more for games because there's much less risk. The good ones also are very explicit in the description on the App Store that it is a first level/trial with IAP.
I find it to be very consumer friendly.
As for the guy's situation it sounds like they need some more nag screens and easier ways of sending them money. (Well it is currently a lot easier than the old days of shareware, no envelopes to fill out, just a button to press.
Yup. For what little it's worth, "IAP" is a big red flag to me, a warning that the "free" app will prove annoying and/or expensive. I'll usually not download any with it, having learned the hard way (right or wrong) that at these prices it's better to pay the couple bucks up front and get the full clean app, than get "free" and have to wrangle with brokenness and intrusive ads and still end up having to pay.