Leaving aside that App Stores don't have upgrade pricing (I don't really understand why not — is this a case of hubris on Apple's part? Given that they offer things like bundles, presumably it isn't a technical limitation), I think a fairer approach would be a hybrid one: buy for, say, $10 upfront, then $2/yr. This gives the developer some amount of recurring revenue to finance ongoing maintenance (such as to make it compatible with newer iOS versions*) while not feeling too pricey for the customer.
However, it seems a lot of customers still balk at any subscription no matter the cost, and there's just not much that can be done about that.
*) or, as the case may be, to appease people who suddenly want to run it on an entirely different OS
I guess with upgrade pricing, there’s always that question of when do you keep a feature for the next paid update, vs pushing it down to your existing app for free. It doesn’t seem any different from when fantastical was releasing a new version of its app every year (essentially making it an annual subscription of sorts), except not everybody upgraded, and there’s always that one guy who just so happened to buy the app just as the developer released the next upgrade, and then complains that his app is now outdated.
Subscriptions tend to cost more, but also resolve a lot of the tension by removing the decision of whether to upgrade or not. The customer is assumed to always be on the latest version of the software, and the developer has no incentive to withhold any additional functionality.
Personally, I am still coming to terms of subscription-based apps, especially when it comes to software that I don’t use heavily. For example, I guess I am reliant enough on the calendar app that I am willing to subscribe to Fantastical just so I don’t have to deal with the problems inherent in the stock calendar app. And since I am all in on the Apple ecosystem, paying to have the app on my iphone, ipad, Apple Watch, imac and MBA (and regularly updated across all platforms to boot) is actually a pretty good deal overall.
That said, I don’t think I would use another app like say, LumaFusion enough to justify a subscription if they were to ever move to that. I will use the app from time to time as my job as a teacher calls for it, but I haven’t really explored the more advanced features, plus there will be occasions when I go for months without opening said app, and that’s when I feel like I am wasting my money.
It’s...complicated.