Why do game devs still bother with virtual goods?

I don't see why devs still bother with virtual goods. A lot of people have been chasing the virtual goods carrot recently, but are they still the best way for small developers to make a game?

The problem with virtual goods is that you need millions of users in order to reach $1M in revenue, especially with free-to-paid conversion rates for most social games being in the single digits and average revenue per user (ARPU) often hovering around $1.

I wrote a in-depth blog post about this (read it here) and would love some feedback. Thanks!