The money for it has to come from somewhere. If you want to protect your privacy (which you should) then you’d be better off paying for services like that than not. It’s been circlejerked to death but: If it’s free, you’re the product.

It was not always like this. When this "everything is free" craze started, in some cases the idea was to offer something free to attract customer to the paid services. In other cases the idea was to show how powerfull was something (Altavista for example was a demo to show how powerfull the Alpha processors were at the time) and were seen as another way to have some visibility. Other cases were investments from entities to offer a public service or something similar.

It is only when companies were born with only the free service to offer that what you say become true.

Even Lemmy is not immune. Sure it’s FOSS, but it’s not free to host. Someone has to pay for servers, data, web domains and more.

True, but the costs are way lower and are also distribuited. I can host my instance for a reasonable low price and if I want I can share the price with some friend for example.
See Lemmy as the old BBS, of course there is a price but it is the price of a passion/interest.