Bro, c'mon now. I hate using this argument, but if you promise your users a free upgrade and you break that promise. WHO THE FUCK WILL EVER TRUST YOU AGAIN? That's a lame excuse! Don't promise something that you can't keep. That just reflect badly on the company/developer. This is not about the money. It's about the integrity of a company.
Part of actually owning up to your mistakes is accepting the consequences gracefully.
He shouldn't have made the promise in the first place, but now that he has the only responsible thing to do is to fulfill that. He can say it was a bad idea, and ask for donations if he wants, but he shouldn't go back on his word. His fuckup, he's the one that has to deal with the consequences.
How can you not understand that $60 is huge money to some people? It doesn't matter the price, it's expensive to someone. He made a promise about what that $60 buys you (namely, TM1 and TM2), so he better deliver.