The f2p option isn't truly a f2p option in the sense people think. If you have ever played Runescape their model is the closest to ours.
Runescape:
Members get items f2p don't
Members get access to more quests
Members get access to more skills
Members get access to more areas
Members get access to more abilities
Etc....
That game has a very very similar model, less updated graphics, no organised pvp system ( Besides the duel arena, clan battlefield, clan wars/castle wars etc... and the wilderness.) All of which besides the Wildy and Duel Arena are Members only.
You have to limit certain things or people will never pay for a thing. And despite the word FREE it isn't the whole motivation. It is motivated to get people to pay for a sub eventually.