[Android Software Development] Chainfire:
If a consumer likes the app but dislikes the ads, said consumer should buy the full / pro / ad-free version.

Ads themselves bring very little in profits unless the app is used a LOT (like the Angry Birds example, which is extremely rare), and it's the correct type of app. A game is always in the foreground, you actually see the ads. A utility which runs a background service and is built well so you hardly ever need to interact with it, you'll see the ads pretty much never, and click on them even less. It is even arguable that a less well-built app brings in more ad-profits because you need to interact with it more.

I would argue (and in my experience this is correct) ads have more effect profit-wise in the number of people who are annoyed by ads and thus buy the full version than the ads themselves bring in. This is an important effect of ads that should not be overlooked, and this is IMHO a more important revenue stream adblockers negate than the ads themselves.

As for how big the percentage of adblocker users is, also depend on the target. For example, an application with ads targeted at root users, is much more likely to get adblocked than a non-root app. I would guesstimate (based on my own experience) the factor may be as high as a 20x difference.

At the end, it all comes down to that the user wants things to be free (and somehow they still want to be payed at their own jobs) while developers want to somehow get payed for their work, just like everybody else does. Somehow most users these days seem to think that because they technically can rip people off, it is not morally and ethically irresponsible to do so.

Reasonings like "I wouldn't pay for it anyway" or "I can't pay for it" or "I won't click the ads" or "the interface with ads annoy me" or "the ads take my limited bandwidth" are all both nonsensical and invalid in most cases. If you don't like it, be a real man and just don't use it, or pay for a version that doesn't have these limitations (and if it doesn't exist, again, simply don't use it). Don't have a credit card? Get one. Don't want to click ads? Then don't. (Or did you think they were placed in that annoying spot by accident ?). Want it different? Pay up. It not being the way you want it is never a valid reason to rip others. Ads taking your bandwidth? Pay up.

I'd like a car like yours, maybe I should just take yours and leave you empty-handed ?

Now of course with the latter statement, you would get people arguing that the unlicensed copying of software (in this case, yes, I am equating adblocking on ad-supported apps to piracy) is technically not theft while stealing your car is. While that would arguably be true from a dictionarial definition standpoint, it certainly isn't true from an economic standpoint.

As anyone with some knowledge of economics will assert to, a product's price calculation (excluding gaining market dominance or entry factors, simplified) goes something like this:

sale price = ( (research and development / expected units of sale) + (manufacturing cost + distribution cost) ) * (1 + profit margin)

Because "copying software is essentially free" (though distribution can still be a big amount, it is for more popular projects usually a negliable factor), the argument is usually that the manufacturer (developer) doesn't lose anything. In reality, all it does is remove (manufacturing cost + distribution cost) from the equation, and still leaves you with the costs of research and development and profit margin. Therefore, there is still a very real correlation between the economic effect of this and the economic effect of "actual" theft. It is not an unreal possibility that the developer of a semi-popular ad-based application could buy a new car if there were no adblockers, while now he is flat broke.

Adblocking in this case reduces the total units sold because there is no way or incentive to pay up. It is the same as piracy in the way that you are using something for nothing. Then again, it shouldn't be outlawed in the same way that BitTorrent shouldn't be outlawed. It's not the tool that is the problem, it's (the bulk of) the people using it.

Wow, I've really gone off on a tangent today. And that's not even including developer rights vs user rights, or when no ad-free version is available, or the guns vs piracy difference, or how developers on Android don't make any money anyways, or etc etc.