Although getting the best of two worlds is quite hard, I think that the free demos might help spread the world about the games.
I don't know how the ad revenue works, so please correct me if I'm wrong. A free playable demo of about 10MB to 20MB can be put on popular websites that might generate some add revenue. And, evidently, the demo itself would work as an add to the full game.
I was shocked when Craig decided to sell TPA2. And I would have preferred that TPA2 would be free (as I guess anyone else wanted, even Craig). But everyone has to make a living, and from Craig's (brief) comments, it was clear that the sales of TPA2 generated more revenue than the ad revenue from all the other TRPG games (again, please correct me if I'm wrong). Therefore, I understand Craig's choice on selling his games from now on.
Excluding minors from the market is indeed a problem. I don't really see a nice way out, other than the minors asking someone to give them the game or to buy it for them.
Another problem raised is related to the way the games are sold. Most online stores aren't (fully) trusted, at least in the country where I live. Not because they trick people but because the direct human contact is missing. The problem may be bigger in this case because we aren't buying a CD (or something else physical) - we are buying a link to be able to download. So, again, it's another layer of virtuality that may give people some discomfort on buying.
I haven't any good alternatives to the way it's done. Selling CDs will increase dramatically the costs (the CD itself with the case + shipping costs, including personnel costs). Selling on well known stores (that might benefit of higher trust from the consumers) may also reduce the margins, particularly since there might be some attempts of price squeezing.
About ads. I must say that ads annoy me (and I hate those blinking ads). So, I was happy when I found out that Firefox has Adblock Plus. As more people do what I do, the revenue of ads will be lower. Ingame ads might be an alternative, provided they aren't all over the place. I can accept a preloader ad (no blinking, please) and a couple of discrete ads in the main menu or in the high score table or in the middle of the game. More ads than that and I might feel too much pushed around and end giving up on the game.
Most people don't care about supporting the developer that much if they can cut it cheap.
Unfortunately, I think that I'm included in that category. I hope that Craig is successful but there is a (low?) limit to how much I'm willing to spend. I just hope that my bug tracking and suggestions are helpful.