Wow.

So many replies...
Based on the responses, I think I should first clarify my idea/question a bit more:
1) What if the game was free to play? You could play the game A LOT to earn experience, and then unlock items and extra ships; or you could pay for them straight up. Hell, maybe even pay a subscription (or a equivalent one-time-payment) to allow the player earn experience more quickly.
2) We are assuming you have not paid anything up until the Microtransaction. So its really no different from a coin-op arcade...
3) The extra items, upgrades, and ships don't give you an advantage. They're just different (kind of like the different characters in fighting games). The game will still be more or less fair and based on skill rather than how many days you've spent grinding.
4) Ship Appearance Customizations - these obviously don't make a difference to gameplay, its only for players that want it. I would imagine some people are willing to pay/play for these changes to standout from the crowd?
The only way for a developer to continue to create and introduce new content (such as ships, items, etc...) is if the consumers are willing to continue to pay for it (and continue generate revenue for the developer/publisher).
Maybe its just me....but the opportunity to play a game until I want to pay for anything doesn't seem like that bad of a proposition.
