But for a service that's 100% social (i.e., they offer little to no value without the content that their users offer), it's very very difficult to put revenue on the same level or above growth. The growth is essential to gaining the momentum required to monetize a social service like that.
I don't think you have to degrade a product when adding premium features. For example, I'd pay a few bucks to have lists or user groups in my stream. But adding that feature at a pay level doesn't degrade the service I already have. I really think Twitter is smart enough to avoid degrading the service while adding value. They've done well with that so far, at least.