It can be both. If people find the ad supported web unpleasant, doing the right thing for the user experience is also something that benefits their bottom line.
I wholeheartedly agree. A convincing argument can be made that the reason Apple is so successful is precisely because Apple business goals are in alignment with their customers' and users' interest.
I think "free with ads" is being done backwards most of the time. It's all about analysing the user to algorithmically determine the best pre-designed ad to serve them. It's tacky and people are extremely good at ignoring it, even without ad blockers.
"Free with ads" should be that my favourite authors get paid to use a product or service and then write about it if they like it. I don't want to see ads for things that a computer predicts I will like, I want to see ads for things that someone I enjoy reading, and share similar tastes with, likes.
Yeah I don't think ad-supported is good for mobile games. What are we doing at the moment? Forcing players to watch videos to earn coins, sticking ads in user's faces. No one wants this. It just dilutes the value of advertisements and annoys users.
Just because it generates money doesn't mean it's the right thing to do.