You answered your own question above, and also identified why app.net won't interest you. If you're okay with ads, then I think you'd get zero utility from app.net
Are ads in and of themselves really a huge problem? I don't find myself often annoyed by them. Now if there were a systemic change to the service because you didn't have to alter the experience for users to generate ad revenue, then I begin to understand. However if this is the idea, then in what ways the service would be different is exactly what I'm trying to figure out.
Remember, there are two sides to the coin "we offer a better experience without the ads" method. First of all you are going to get a smaller user base. So how much are you going to charge? $5/month? $10/month? You would need to get a pretty massive user base to be able to pay the overhead and attract top engineering talent, so in the end I'm not sure you'd be a whole lot better off.
A lot of people don't want to be the product and believe when a company focuses on them as a customer rather than them as eyeballs to be sold to advertisers, who are the customer, then a better service is the outcome for the users of the service.
With app.net the user is the customer. With Facebook and Twitter, the user is the product. With App.Net user interests and service provider interests are aligned. The provider wants the service to be better for the users.
With Facebook and Twitter and other ad supported products the users who value their privacy have intentions which are constantly at odds with the service provider whose intention is to continually open up details about the individuals so that those details can be used to improve ad success rates and profitability.
Where's the evidence that suggests that millions of people care about this distinction enough to pay for it?
I don't think Twitter has any other choice because they chose the free path from the start. I highly doubt Twitter would suddenly switch to a premium/freemium model.
While Twitter has empowered revolutions, I think the quality of the community has degraded though.
I believe that if people pay for being part of a community, people would care to improve its quality. If something is free, people just won't take care of it.
If the quality is degrading it's because of YOUR friends and YOUR choices about who to follow. Other people including myself simply hide posts or unfollow when the SNR becomes too low.