Before I delve into the more interesting issues surrounding the F2P or "freemium" model, let's just start with the baseline of:
Many people i know want pay for osi service.
Now, I presume the original poster meant to say "won't pay for OSI service," not "want pay," but I digress... this is exactly the issue at the crux of what some people believe "Free to Play" means. Free to play does not, in any way, shape, or form, actually mean "free to play." Why then call it that? Because on the surface it's true, but when you delve into it deeper, no one runs a "free" service. Developers of "freemium" games are hoping you will spend money with them in order to foot the bill for their development, and have discovered that in some forms, players dislike subscriptions. Here's the thing: The original poster actually wants "FREE." And that is never going to happen. OSI, EA, Mythic, Bioware Mythic, Broadsword, you name it: They all need to make a profit of some sort to keep the game rolling.
Nixing the "FREE" part of "free to play," we move into the freemium model, wherein the idea is that people will spend an acceptable amount of money each month in order to help keep the game afloat. That means a constant influx of new items into the store, with price tags that at least seem reasonable so that players are encouraged to spend their money. By definition, housing would have to be attached to that market, because it is a permanent mark on the game world if it is no longer tied to subscriptions -- or you would have to have a mini-subscription for it. Now, I have discussed in the past that I would certainly condone moving to such a subscription plan, and that the amount paid per house could be based on the size of the house, and then, let someone own as many houses as they like, as long as they are paid for.
Thing is, housing really sort of nixes "free to play," because it is one of the prime reasons people play. If you have to subscribe for your house, why not just subscribe to begin with? Sure, we could move to a model where a full-size house is only $5.99/month (18x18) with a castle at $7.99/month, and maybe 7x7s are only $2.99/month, and scale from there. It would probably work too, as you would have some players that would pay for dozens and dozens of houses. They would definitely have to be subscription based though, because UO housing is not instanced, and that being the case, what would be fair for a permanent house? Let's say a 3 year price-tag up front for a castle: call it $120/year or $360 for a permanent castle. Sure, some might pay for it... but not a lot would. All housing at a one-time charge would have to be super expensive, and that makes it -- and UO -- less attractive. A one-time charge would also convey permanency, which means in 10 years, you're no longer playing, but your house still exists: how long before the shards are filled beyond the point of use?
That's just tackling the base issue of moving to free to play. Sure, lots of other things could be sold... garden beds, potions, suits of armor, and so on. Of course, development time is then split between bug-fixes/content and F2P content, which, again, to maintain a decent payer-base (not player-base) has to be frequent, worth the purchase, and continual.
I'm sure someone will accuse me of looking at this only through the lens of my personal experience, and that might actually be true. However, my personal experience is, you know, working on a masters degree in game development. Just so happens, I've done more than armchair research on the F2P model, and have a pretty fair idea what would need to happen to make it a success. This doesn't even begin to touch the core development time that would be necessary in order to build in all of the F2P systems that would run at the core of the game.
Completely forgot to add: All of these "studies" that "show" that there are more people playing free shards than on EA's servers: (1) Objective studies with empirical data? I doubt it. (2) Assuming that people are playing for free, they're getting exactly what they pay for, and my understanding is that with rare exception, most are a handful of players on at any one time. (3) It's amazing that illegal activity -- playing on a free shard -- is touted as a reason to move to a free model: "Other people breaking the law are playing for free, so why won't the company that made the game let me play for free?"