Adding advertising into content that was created without it in mind fundamentally changes the experience for all tiers of viewers, for the worse.
First, advertising tiers end up with ads shoehorned into content that wasn't created with ad-breaks in mind. You can see this first hand already on the Roku channel and other services that have gone a similar route. It's been an issue since the put movies on TV. Now imagine all those awkward ad breaks in the middle of bingable series.
Second, this effect will inevitably put pressure on content creators to tailor new content to fit into the format, reducing creative options and diminishing overall quality of original series.
Third, integrating advertising into thousands and thousands of hours of content, regardless of its source, is not free - Netflix would have to either pay for a huge amount of labor hours custom time-marking shows for ad-breaks, or rely on algorithms that have proven pretty terrible at predicting where a break makes sense without ruining the watcher's experience. That's not to mention the additional advertising and sales staff they'd have to hire. These extra expenses would eat into the additional income from advertising - possibly enough to make raising rates on paid tiers even more attractive.
In the end, it looks like a net-negative for paid subscribers, meaning they will be one step closer to cancelling their paid subscription. Viewers like me, who only watch a handful of Netflix exclusives (like the mentioned Stranger Things) will start doing what we do with Apple TV and Paramount+ right now - wait for a handful of shows we want to watch to become available, subscribe for two months, binge them all, cancel subscription, and repeat. Then it looks like a net-loss for Netflix.
As more and more services integrate cheaper or free advertising tiers, Netflix (like HBO) will only look better and better to people who are happy to pay a certain amount for good content without commercials, but not an unlimited amount.