I don't understand why techies are so quick to flip the "Race to the Bottom" switch as the defacto product marketing strategy.
Consumer electronics compete on price because they're mainly commodities... Your Samsung TV is pretty much identical to your Sharp or your Sony. How do you differentiate? Price.
There's so much more innovation that you can do in software that competing on price is pretty lame.
"Clearly this is a more appropriate meta-idea for software / internet products where the cost of replication and distribution is almost zero."
S/he gives the example of Plenty of Fish... I guess it depends on how you define "almost", but scaling up to support that many users (which is required to make serious $ off of "free"), you certainly have real costs. POF has hundreds of thousands of dollars invested in servers, not to mention bandwidth/elec costs.