How SHOULD small game companies make money?

The one thing that astonishes me most about the often strong opposition to microtransactions is that it always sounds as if people want everything to be free. Nobody would pay a $15 monthly subscription fee for a small game like Luminary, and even if you reduce that to $10 or so very few people would play these games. Given that you can get WoW or WAR or LotRO for $15 a month, smaller games simply look like a bad deal in comparison.

So if they aren't financing themselves with microtransactions, how do you think smaller MMOs SHOULD be financed? Do you want an advertising break between killing a boss and getting his loot, or ads plastered all over fantasy towns? Do you want to pay per hour? Or do you want the game developers to starve and make these games for you for free? If you don't like microtransactions, what alternative do you propose? And what makes you think its viable?