I think this is a terrible attitude. I will never implement it in my own support model. People shouldn't have to pay me in order to report a bug in my system. Arguably I should pay them, because one report is the tip of an iceberg of silent affected customers.

More often than not, what most people want is simply an acknowledgement. They're not seeking a bug bounty. And definitely not the brush-off you just gave the GP: when someone's house is on fire, you don't demand prepayment for the water.