The fact people can't even admit that illegally downloading music is stealing no matter how may reasons and justifications you throw at it
I mean, I really don't care what someone does to acquire music. Good for them. But the borderline delusion around it is kinda silly, and it really does come down to just "I don't want to pay," regardless of what it's for (I don't want to pay for a new artist's song, I don't want to pay for music in general, etc.), and it definitely doesn't make the argument for free streaming stronger.
As for what's best financially, it's impossible to know without seeing the actual books. Chances are what Spotify wants is that SOME users upgrade. For example, I can totally buy the idea of at least 10-15% upgrading, probably more. And considering how little freemium makes for them, it's possible losing every other person but that 10-15% to pirating would STILL end in a net profit. It's not about how many people you reach, it's about how much money you make. I'd imagine Premium makes WELL over 100% more than Fremium does, so it probably is more profitable to do this and hope some upgrade
I use iTunes, so don't care either way