Correction: SugarSync has never offered a 2GB free forever package. We did drop the pricing around 50% soon after launch in response to market feedback, but the free offering has always been time limited to 45 days.

Sharpcast Photos, our previous product which synced only photos, did have a free package. This product has been discontinued (it is still live for existing paid customers for a limited time). I’d say your analysis may well be correct for Sharpcast Photos – the free version was so good there was little incentive to upgrade to the paid version.

SugarSync is a quality service built on quality infrastructure by smart people who get paychecks. As the product is not smothered with advertising the cash has to come from satisfied customers continuing to want to use the product. This is a great incentive for us to focus on providing a quality product rather than just spreading it around to as many eyeballs as possible. Rather than limiting addiction, the free trial/full function introductory period allows users enough time to get addicted enough to sacrifice the price of a cup of coffee every month to feed their SugarSync habit.

(disclaimer: I am a Sharpcast employee, but not in Marketing)