New Zealand is a modern, English speaking, very politically free and open country.. They are very much a part of the "First World", but so far have avoided many of the more "Police State-y" laws and regulations that you seem eager to be away from.
+ 1 for NZ. NZ is the only country in the world where, on average the women have had more sexual partners than men. It has the highest non-religious population in the world - meaning no laws are influenced by religion. Housing is cheap given the recession. And if you earn an income from outside of NZ while living there, you enjoy 4 years 100% tax free income.
Also, anyone in business will tell you that money/price is hardly ever a deciding factor on whether someone will pay for a product.
You're probably right..... it's ALWAYS only ever about price and nothing else... 7 Eleven doesn't sell convenience and you always hunt for the cheapest cola at 3am. BMW doesn't sell exclusivity. This is why everyone buys hyundais and nobody spends over $30k on a car. Hospitals don't sell urgency - When you're having a heart attack at 3am and need treatment ASAP you'll always hunt for the cheapest hospital first. Harvard Business School did a little study on this years ago and found that only 10% of the time is decision to purchase ever based on price alone. There is nearly always a subjective reason behind it....
Websites that provide something of real value for free either have a really smart beachhead strategy, or havn't yet figured out how to monetize what they do have.
Also, anyone in business will tell you that money/price is hardly ever a deciding factor on whether someone will pay for a product. When you go applying this to existing websites it's clear that giving things away only represents a small portion of the overall market. An example is plentyoffish vs match.com - it's all in the value!