In the long run, this is not a viable business model. Servers might get cheaper every day, but you're still going to have to pay for them every month your service is up and running.

Facebook makes $36/user per year, on average. They are mostly about photos. Instagram knows this. $0.99 will be cutting it way too short.

I don't understand why companies like this don't just offer an ad-free pay option with a stronger privacy policy as an alternative to their free option and make everyone happy, except the total freeloaders who want free and their privacy protected. Seems to work fine for Flickr.