I realize the conversion rate could be lower, but why not put this CTA in a non-pop-up form at the end of the article? If I really enjoyed it, that seems like the point where I'd be on board with signing up.
It seems you've answered your own question.
Your metrics may show that you get 0.2% signups with this method rather than 0.15%, but they likely don't show the much larger number of people who won't be coming back to your skeevy site, ever.
On a web page, I tend to scroll using a single finger or knuckle on the arrow keys. Requiring a mouse at that point (or extra keypresses, if those even work) breaks the reading experience.
If this is a castle, it's not a very inviting one.