Yes, not everyone will be able to do it. Yes, it's way way easier to do so in a blue ocean. I do branding work as part of my agency sometimes, so I definitely feel what you're saying when it comes to "free is low value, premium is high-value"
To find the balance is to experiment, just like I'm 100% sure you've seen along the years. I'm not advocating for charity, I like businesses, making money and unlocking value. The point of freemium was to give equality of opportunity: if a business is using your product, they're starting something.
By offering them the chance to have a lean start, eventually when they get to win (because that's why they use a product, right? To create more value, either financial or of some other kind), they're already locked in to your service and grateful for you helping them in the beginning.
And that's not only about new businesses. It can be applied to big corporate companies that start testing a new thing — obviously they're going to go with the less stressful and time-consuming option (if there is one) and test it at a small scale before biting the bullet