The same thing happened to the music industry. The total amount of revenue has dropped 10 fold since 1999. I know a few independent artists and they can't really make a living on just music anymore. They need to sell t-shirts or have a day job. So in the end, free music and file sharing has decreased the overall cost of music, but it really only hurt the small and independent artists.
Even look at things like Spotify. 1,000,000 plays nets an artists something like $100.
It has forced many artists to go with large labels because the large labels will take all of the risk and actually pay them some sort of a living while they are touring.
Software is going the same way. With all of the open source out there (and more coming out every day), it has allowed companies to hire software mechanics for pennies instead of software engineers for a living wage. Why? Because all of the parts that need to be engineered are given out for free. Development now in most businesses is mashing frameworks and libraries together. It really doesn't take a computer science education to get the job done.
Business owners are also becoming more tech savvy as the older generation retires.
I've never seen so many smart communities of people put themselves out of a job so quickly.
To me, apps are just an interfaces to a paid service, not the actual service itself. So, I might have a service that you pay X amount of money to use and the app is something free that is thrown in as a benefit.