Would you RATHER they charge for the game (one time fee)?

[Wayside]

No.

I like the risk/reward proposition that the micro-transaction model presents to developers. Throw something in the game without thinking about it, without really making sure that the community will value that addition, and you risk making very little or no money on it.

On the other hand, if you release 10 features or items and ALL of them are great, you stand to gain a great deal more in terms of profit from people who choose to buy most or all of them.

Furthermore, micro-transactions grant companies unique insight into what customers truly find valuable in a game. Its one thing to lead a forum crusade in favor of or against a feature or item. Talk is cheap. It's another to actually be willing to pay for a thing. Purchase habits and trends are going to give SOE some of the most reliable feedback possible as people are put in a position to vote with their money.

Lastly, it's self regulating. There's no real danger that someone in marketing or sales at SOE is going to get carried away with prices. That's a lesson CCP had to learn the hard way not too long ago. You can only charge what the market will bare, and unlike bundling everything into a massive expansion, micro transactions allow customers to pick and choose what features they truly find valuable - BEFORE spending their money.

That went longer than I thought it would, but there it is. My 2c. :P