What I Would Do If I Ran Tarsnap

so what? my impression is that colin is happy with things as they are. why should he change his business, which makes him happy, because someone else thinks it should be different?

the aim of life is to be happy, not to meet someone else's expectations.

I'm intentionally value-agnostic about whatever makes Colin happy in the post. As long as operating businesses suboptimally is not in fact his terminal value, there exists a transition between Tarsnap and Tarsnap' which makes him even happier. Everybody wins, especially Colin, which strikes me as a happy outcome because I like seeing when geeks are suitably rewarded for creating substantial improvements to the world, which Colin has done.

If running Tarsnap as a free public utility is the light he wants to bring to the world, the outlined Tarsnap' is better at that than his Tarsnap is. Charge businesses more, invest in better UX, subsidize non-business users straight to "free." If he wants to lay on a beach sipping iced cocoa, this is more beach and more cocoa. If he wants more time with his family and less time in the inbox, this is a trivial modification away from that. ("Make money, buy your way out of inbox.")