I strongly think that he is likely to be empirically accurate with regards to the free apps.
Relatedly, you should always have a price tag on anything you are selling so that you do not compromise people's perception of its value. (This is not necessarily going to make you the most popular person in your techy circle of friends, but then again since they won't actually buy your stuff their opinion is not the world's most relevant.)
If you give it away for free, give it away by special arrangement. (Which will make people feel like they're in the in-crowd with backstage passes, rather than entitled louts.)
There might also be an effect of people wanting more badly to like the app and "deluding" themselves... if I pay $0.99 for an app, I don't care too much if it works or not, but if I pay $29.99 I'm going to want to like it for reasons of self-validation.
Alternatively, you could conclude that the difference is in the apps. 75%+ of free apps in the App Store are junk. Paid apps tend to be much higher quality offerings in my experience.