You can serve ads without any of the invasive tracking, and you can have paid access without any of the invasive tracking...
I don't think most people actually think digital things should be free, just that they're not invasive data-hoarding piles of crap.
None of that is an argument as to why they should track people. You even mention why its not a problem not having tracking, since they can just increase amount of ads to compensate for lower earnings per ad. The ad-supported free teir is probably going to be even worse dogshit than it already is, but the paid tier would be better than it is now because it wouldn't have ads. And neither would have privacy invading tracking, it's a win-win since they get to earn money on their product and we won't be tracked.
...Of course this under the assumption that their business is actually providing a service to their users and not just using it as a fly-trap for data-farming and profiling of their users. In case of the latter, yeah fuck 'em and let them earn no money if that's the case. i hope legislation removes that business model from existence.