Services and software that has no revenue model at all makes me nervous as a user. The problem isn’t unique to Web services. I’ve watched well-supported FOSS projects grow and prosper (Firefox, Linux, Hadoop, Apache, etc.) while hobby projects that I’ve taken a liking to eventually sputter and fail because the lead (usually only) developer or developers couldn’t swing development in addition to a full-time job.
For mature, well-supported and innovative services, you need money. What’s more, you need a direct correlation between satisfied users and income. Ad revenue doesn’t cut it.