I remember when I first got into the Internet Industry in 1995 as a founding employee of HotJobs.com. Back in the day, there were very few online services and e-commerce sites, and revenue models didn't really exist for conducting business on the web.
So companies ended up giving stuff away for free. The prime example is probably news content. I visit Cnn.com and the NYTimes websites daily. Both services have had aborted attempts to feature paid content. CNN tried it with video, and the Times tried it with archived articles. Both models have been refined in the past year, notably with CNN interspersing advertisements into the video content. The Times is also a large ad-revenue machine with a "circulation" that far exceeds its print edition.
When new online services emerge, they are often free. MySpace and the Facebook, two of the most popular social networking sites are completely free and rely soley on advertising content to pay for their operating costs. Because of the ubiquity of these specific services, people begin to believe that they are entitled to free services. People question why they should pay for anything.
But very few sites have large enough audiences to exist solely on advertising revenue alone. And I can't think of a site that offers a truly professional level service that is free. Nor should they be. A professional application shouldn't be subject to fluctuations in the advertising market because what professionals want most is consistency.
You don't want your ability to store photos to be arbitrarily cut off because you exceeded a file size limit or bandwidth constraint of a free account. Therefore, you spend money to ensure that the availability is high. It is the same reason as photographers, we spend $3500 on a digital camera with a magnesium body and weather seals. We can't have the damn thing fail when we need it the most. We also seek features that are specific to our niche. Professionals don't use consumer point and shoots because they have more specific needs. They pay more for a camera because they understand the cost to develop a camera that shoots 8 fps with a 48 frame buffer is great than a point and shoot with a 0.5s shutter lag.
I bring this up for the simple reason that professional photographers understand the cost of doing business, while amateur photographers do not. Amateurs are content to take their disposable income, shoot pics, and offer them for pennies. They are unconcerned with the cost of doing business because photography is not their business. Professional photographers, on the other hand, won't question paying $6-$500/month for PhotoShelter because they understand the value of the service vis a vis other "free" services out there.
If your "business" is getting as many friends linked to your homepage to leave glowing comments about the latest snapshot you took of your cat, then PhotoShelter isn't for you. But if archiving, distribution and sales of photography is truly your business, then welcome. You're exactly who we're looking for.