Yes.
People who are used to paying up front for games don't like freemium, so they don't play them.
However, 10 to 1000 times more people who don't like to pay for games download them because they're free to download. If a small fraction of those players later decide to upgrade, the game makes even more money than it would have from catering to the much smaller number of people who pay for games up front. Who cares if they complain? Further, since so many people can be seen playing these free-to-download games, they generate even more downloads from this free advertising.
You know, if it were a matter of "upgrading" I wouldn't have an issue with the freemium model. However, that's not what the model is. It is a matter of constantly having to pay to play, unless you want to take the "slow road". There are a number of these freemium games that I have downloaded and played, and even enjoyed. I have, however, never, EVER bought any in-app currency, and for one simple reason: it's always, ALWAYS grossly over priced. There is one game that I've played where if you wanted to "buy" all of the possible bonus items (at any one time, as they continually add new ones and retire - temporarily - old ones) you would have to spend several hundred dollars on in-app currency. To me those kind of prices on a game that isn't even as elegant and impressive as Real Racing 3 (which, based on the promo video, is quite beautiful, if nothing else), is simply disgusting.
Now, if there were more reasonable prices on the in-app currency, I might well choose to spend a dollar or two here and there. But if I am going to spend, honestly, $20, let alone $100 or more on such a game, I would expect to have essentially have a god mode that would allow me to effectively have as much in-app currency as I want. Beyond that, the games aren't worth it.