Why not offer the customers an option? Download the game free with limitations that you can buy in game stuff to get around, or pay $5 and have the limitations removed (or an unlimited amount of the in game currency whatever. Sounds like the next logical evolution of shareware, to me.
You would probably get a lot of people who would download the game free, try it out, maybe make some in game purchases, then decide to upgrade to the $5 version, so you would make $5 + whatever they spend on in game items before upgrading. (Or whatever price you decide to charge). You won't be making hundreds off anyone, but you'll probably get more bites overall.
If you're honestly asking, the reason this isn't done is because the main source of revenue for these free to play games are the people who become addicted. ("whales") They spend enormous amounts of money and if they had the option to just upgrade then this would cut the legs out from the main chunk of the revenue the game generates.
What child has $500? "Whales" are adults. (Usually, specifically, they are people in high-stress/high-reward jobs, like finance, who want to release their stress by throwing out their rewards. Same as casinos.)
Children use their parent's phone, there were a spate of cases recently where children's apps had a ton of expensive in-app purchases and hooked children ran up $2000-$3000 Bills
Apple could put an spend curve next to each game too presumably (if they don't have stats they could make it a requirement of entry to the store to furnish them going forward).
Then you'd be able to see easily that more than 50% spend more than $10 on that 99¢ app and factor that in to your purchase decision.
Some apps, of course, do this. Paper on iOS, for instance, is a free app that relies upon you buying each of the tools. Alternately you can buy the whole set of tools for a given price. There are official emulators (e.g. Atari) that let you buy individual games, or you can buy the set for a price.
You would probably get a lot of people who would download the game free, try it out, maybe make some in game purchases, then decide to upgrade to the $5 version, so you would make $5 + whatever they spend on in game items before upgrading. (Or whatever price you decide to charge). You won't be making hundreds off anyone, but you'll probably get more bites overall.