It's sad when we pay $5 for a coffee made in 5 minutes that we'll drink in 3... but not $5 for an app that took 5 months that we'd use daily for a year.
Most coffee cups already do have ads on them. They have you paying $5 for coffee, AND running around with free ads for them in your hands. And you don't even notice you're a walking billboard for them! Not to mention all that juicy data you're giving them with every CC purchase, or loyalty card swipe...
Not to mention that $5 might be the most expensive app someone buys, and then they expect updates for the foreseeable future despite on-going development costing loads more time. There have been developers who released a separate, paid sequel and were left with angry customers who expected updates to their original app.
My experience has been that since underlying platform software changes so quickly locally run purchases are often more work to maintain than SAAS offerings.