Well, except that didn't stop Apple from offering iBooks, Find my iPhone, iTunes U, Apple Store, Remote, Find My Friends, iTunes Movie Trailers, AirPort Utility, and Cards apps for free…
Indeed. I don't see why they need to charge even 99¢ for it. They made that in the margins of the original products that are capable of running the app.
I have no inside information, but I would speculate that there might be royalty payments Apple is required to make in return for licensing some of the voice and video codecs used in Facetime. On a new device or OS license, these will be rolled in with the purchase price, but when adding functionality to an existing device they're required to cough up $0.1 or $0.5 or some such to the licensees. Hence the need to collect more money.
(This used to be the case with QuickTime: the basic stuff was free, but if you wanted additional codecs you had to upgrade to QuickTime Pro, for real money -- but it wasn't all going into Apple's pocket: it was simply that if they'd bundled all the codecs with the basic application they'd have been liable for extra royalties.)
Yes. It really is 99¢. It is a fantastic app and definitely worth the 99¢. In my experience, it is the best under $1.00 software application I've ever bought spanning all platforms.
This is most likely an accounting reason why they need to charge for this feature for older users.