I agree. The main problem is that their logic behind F2P implementation is... strained... to say the least.
Basically their F2P model only works if the people that come in to TRY the game as Froobs enjoy the game enough to stay, however a great many of those people are part of the 2M players that already quit, and even if they aren't, what makes BW suspect that a drastically watered down version of the game that 2M people quit is going to be able to KEEP anyone.
They had essentially two ways to go. They could pump time and money and energy into this game substantially improving and adding real and interesting and cool things to it that would grab people's attention and make them want to come back. Then charge for those things to make money.
Or they could break the game up and sell it off like selling off a scrapped car piece by piece by piece.
Instead of adding VALUE to their game, the method they chose basically inconveniences players to the point of buying things, this is a faulty understanding of people that play free games and games in general. If they get fed up they'll just leave, not drop $20 to make a crappy game more fun.
I don't think BW had the choice you outlined on making the game better. They are leveraging the great 1-50 leveling content to make as much money back as possible, and then perhaps the game will expand if it is a successful outcome. If not, EA will just have some more of its investment and planned revenue back.
That said, I think many current subscribers will be purchasing things. The shop isn't necessarily aimed at getting F2P players to subscribe. It's an option to try the game out and see the stories, albeit in a frustrating way that may result in some additional subscriptions.