I just want to state outright that OP was wronged, and I side with them. That being said; I dislike both full subscription (i.e. breaks on expiration) and lifetime licenses. Subscriptions are too expensive for software that rarely gets major investment and lifetime licenses are dishonest (e.g. company cannot work for free, so their funded is based on unlimited growth, which isn't realistic for most). My current favor…
I see your point, and I largely agree with you. One trickynes is with the "This incentivizes them to deliver value" part. The problem is that if the software just "works" and there are no compelling new features the user will quite rationally stop buying new updates. Which incentivises the developer to make sure that either the software never really "just works" or that they hype up new features to create FOMO. They…
If they are deliberately limiting their current product, that just makes it easier for a competitor to come in and steal their business. Every upgrade season people are going to be asking themselves "do I stick with this janky product or do I look to see if there's something better out there?"
Similarly if a company overhypes an update, it will make customers more skeptical of updates in the future. Generally it's pretty easy to wait a few months after a new release is out to see if it's positively received.
There are more nefarious antipatterns, like putting in bugs that don't crop up until around when the next upgrade becomes available, or breaking compatibility between versions so once a critical mass switches voluntarily, everyone else is pretty much forced. But really there's no system immune to abuse by sufficiently motivated bad actors.