Wow, massive ignorance and so much to address. First off, some shows (granted only a handful) actually make MORE money thru hulu.com than thru TV (Simpsons, Family Guy, a few others). Second, why is the outrage over a pay model not directed toward Apple? It was solely and exclusively their decision not to include flash. Was it a processor/battery decision? Maybe. But maybe it was a "we want to sell episodes thru iTunes" not give them away thru flash sites like hulu. Why is nobody yelling at Apple for selling "free" TV shows?
Since hulu is not iPad ready, it has to be re-worked, that is not free. They also need a different advertising model based on portable devices. I highly doubt the time on site is going to be near what it is on the main site and the ads will likely not monetize the same way. Hence, there is a much greater cost to deliver the content. Look at Apple's new iAd, that is the future of mobile advertising.
Lastly, nobody is making you use hulu thru your iPad/iPhone. It's a convenience. That is what you are paying for. You are free to record it on your DVR, rip it to your computer, compress it for your mobile device and sync it thru iTunes at no additional cost to yourself. THAT is what you are paying for, you are not paying to watch "free" TV. You are paying for the delivery method, ease of use and ultimately convenience.
Let's imagine the entire universe of hulu is available on iPad, what is that worth? To some, nothing. To others, it might be $20 a month. I would probably be OK with $10 even with ad support. It's funny how fickle we get after we get something for free. A single DVD is $15-$20, heck, downloading most movies is still $10.
It's all relative people. Imagine that DVDs were free for the next year, then, they started charging for them again. Some people would be OUTRAGED even if the charge was $3 per title.
ash =o)