Oh no...imagine the horror of a world where everything you use costs money!! Like...the entire world was before the internet existed! And yet, humanity survived. In fact, it did more than survive, it actually flourished. It flourished enough for people to actually invent the tech you are getting bent out of shape about!!
The thing you don't seem to be considering is that, while you say that only 1 in 1000 actually pay a dollar to remove ads, that's most likely because of one of two reasons: 1) the app isn't worth the dollar to them or 2) because there is an option to live with the ads, they take it. If the app didn't exist in a free (ad-supported) version then their only choice is have the app or not...unlike now where it is have the free app and live with the ads, have the app and pay a dollar to remove the ads, or don't have it.
And as others have said, honestly, if this means the dying out of tens of thousands of "throwaway" apps that people download on a whim and which don't actually add any real value to their day/life...then I am all for it.
The cream always rises to the top!