It is pretty much the only way to fund "free" services of all kinds that have large reach but no direct income
No, it is not.
Advertisement created this idea of free services being paid by advertisement. There was a different time in this world, when you paid for your newspaper at the kiosk, and if you wanted to have a website for your journal, you would pay a hosting company.
There were also shared-cost services long before things became commerzialised. Back in FIDOnet days, email was transported by phone lines, and a bunch of people would come together, one of them set up a small server that would do the long-distance delivery and the others would pay him a buck or two a month to cover his phone bills while they got their mail for free or very cheap at local rates.
There is no reason that Facebook could not charge for its service. Except that the advertisement industry has created the concept of everything being free. Nowadays, having a pay service is not viable, not for any sane reasons, but simply because of this parlour trick.
Radio and TV in the time when they were sent by radio waves (and not digitally via cable) are about the only things where there are actual technical reasons why a pay service is not going to work. You can use encryption, but in pre-ubiquituous-computing times, it dramatically raises costs for new customers who need a hardware box.
But those times are over. Today, I challenge you to name one service that for technical or other reasons that were not artificially created (i.e. the expectation of customers that it should be free) has to use advertisement. I don't think you can. Everything that can be monetized by advertisement could be monetized in other ways.
The "there are no alternatives" claim is a damned lie, in politics as well as in business.