There are tons of articles about this online. There are regularly articles about it on HN. Noel Llopis is one of many app developers who blogs about his real-world experiences. Here is one such article: http://gamesfromwithin.com/one-price-does-not-fit-all
thx, actually quite an interesting read.
I wouldn't say that the concept of selling an app is naive and outdated. But yes, competitors will probably release a similar app for free, which indeed is a dilemma.
Also, not all apps have potential to generate an alternative revenue stream, if so, great, otherwise I believe it can be quite problematic to monetize on many app concepts.