Interesting post on InMobi's blog
It tries to explain you how much you could win in releasing ads based apps vs paid apps.
Of course, you shouldn't forget it for CHEAP apps only !
The side note of this post is that you have 2 ways to monetize your apps : ads or update your sell price ;)
Another even more interesting thing of this post is the linked Excel sheet : it allows you to quickly find if you will earn more advertising your app.
I made a test myself:
* for apps will a small number of downloads, the answer is defintly "NO"
* for 1M+ downloads, the answer is "YES"
Like for money, the more download you have, the more download you'll get !