So I'm not an app developer, so I might be completely off base, but I don't really understand a lot of the arguments against this.

Firstly, there's an ad free one time cost that in my opinion seems very fair. Secondly, as I'm looking through the feature for Ultra, most of the features seem to be things that require an external server. I'm not sure how push notifications work so I can't comment on it, but syncing settings across devices for example doesn't happen at the instance level. That kind of thing could only be done through a server owned by the dev. However, it is very likely that the dev doesn't own a server, and is instead renting on a VPS, which is a subscription for them. So in order to provide these particular services, the dev has to pay a subscription. So would it not make sense that those that enjoy the benefits of this subscription the dev pays, also have to pay a subscription? In my mind that simply seems fair, in order to support a dev that has clearly put a lot of time and effort into making a great app.

The user base for Lemmy is significantly smaller than Reddit. The dev needs a smaller number of people to be able to support the operating costs of the app (as well as the wellbeing of the dev) which means that necessarily a different (and steeper) pricing model would be necessary.

I do not think it's fair to claim that Lemmy API access is free and therefore there are no operating costs, because there's more to the app than API calls. It is indeed correct that API access is free, which seems to me to be the precise reason why there exists a free version of the app that you don't have to pay for in the first place. All API calls within the app are free. There are no paywalled Lemmy API calls, at least from what I can tell. But again if I'm wrong I'll admit it if someone can inform me.