[miles]

any companies have tried the freemium model and then realize that it can't scale (IE: the costs to support this free user base out weighs the benefits).

It has scaled wonderfully for Evernote:

"From the start, Libin modeled Evernote to be profitable at a 1% conversion rate ... Right now, roughly 2% of all Evernoters are premium customers ... Libin wants to maintain that rate at 5% or less. If people start converting en masse, 'that means our free product isn't good enough,' he says."

http://www.fastcompany.com/magazine/147/next-tech-remember-t...

[rick888]

"It has scaled wonderfully for Evernote:"

This is the exception rather than the rule.