So I'm still trying to get a concise summary...but if I'm reading it correctly you are basically upset that freeware offerings don't get the recognition that payware ones do and that incremental increases to the quality of payware are leaving freeware in the dust and/or killing the incentive for those developers? Is that about it?
If so, well, that certainly is an opinion to have, but I'm not sure I buy it. Hell, have you seen how much action still exists in the EECH and EAW forums? By your argument those sims should have died easy deaths a decade ago...yet they are still being modded and flown and enjoyed by fans (for free!). So it has nothing to do with weather IL-2 or B.O.B. or CoD were any better..it has to do with what each individual likes. Some of us happen to like complexity and new features.
As you know, I'm a pilot in real life, and your assertion that "we can't get there from here" because we are sitting in our rooms playing games on a PC is just patently false. FSX and X-Plane are already most of the way there. Yes, there are differences, but if you went back twenty years and did a side by side comparison of PC flying versus the real thing you'd find a dramatic closing of the gap between virtual and reality. And why? Because of two things - innovation and money. You had and have technological increases, and you have people willing to invest in software development in hopes of making a profit. There is nothing wrong with that. In fact, I'd argue that some developers that do the job for money are actually more passionate about the genre than freeware designers. They've staked their career and family and everything else on tying together their passion for simming with the hard knock life of being a sim developer. So I'm happy when they are rewarded.
And despite your gnashing of teeth, I don't see good freeware developers getting left out of the acknowledgements. I think in my PC Pilot articles I've used and recommended dozens of freeware airplanes, sceneries, and utilities (we've even included many of them on our cover CD). So I'm not sure where this perception that because Level D wants to model the brake temperature test switch equals no appreciation for Dino's T-45 comes from..