Personally, as a plugin developer and plugin user, I really like the idea of high quality free plugins. Currently (at least for the foreseeable future) all my plugin are free and available on the WordPress.org repository. The only thing I would then charge for is services (support, customisations etc.). It is too early days yet to know if this is going to generate enough revenue on its own to support full time plugin development.

I do plan to develop some online/desktop WordPress applications as well as a foray into theme development to provide a more rounded revenue model, but for now is limited to mainly plugins. If I had a very successful plugin and could generate enough revenue then I may not even need to go into theme development but I suspect that may not be possible, but who knows!

Another route is to join forces (i.e. two or more one-man-band plugin authors), and putting combined resources into a premium plugin or putting all the free plugins in one place and making them very high quality with paid support.

Fingers crossed that plugin development is possible to do full time.

If any other plugin developers are in the same position feel free to contact me for further discussion/collaboration etc.

David