All true. But making money with ads is not equivalent to harvesting data and abuse people‘s privacy. And that is the point - everyone (as evidenced by your post) seems to assume privacy violations are required to be able to monetize. But it of course is not, showing ads can be done without excessive data collection.It's not just Facebook, it's numerous platforms.
The economic incentives hugely favor it . . . to become a viable social network requires growing the network to a large scale. The way to do that isn't to ask people to pay - who would pay for access to a network of 1? But free allows people to try something out with no meaningful commitment other than giving up some information about themselves.
Now, why hasn't any network tried to convert its model, or at least done so successfully, to paid? Probably because they're all afraid of turning into MySpace, where everybody leaves for the next "free" network.
That said, perhaps the environment now it's possible . . . start free, but then convert to ad-free (and tracking free) with a subscription model. Really that does seem to work for some apps with the freemium/ad-free model. Try it out and then upgrade to a better (ad-free) experience. Given people seem somewhat more aware of how companies use their data, it's not inconceivable to see it working.