I consider myself sensible, but I would never use IAP, except under one condition: the old "shareware" method. That is, distribute a demo for free, charge for the full game. Even this model has been abused though with certain expansion packs (cough cough Mass Effect).
The second you start treating your customers like cash cows, the faster history will forget your game. Make games that are fun to play, charge enough to support yourself and expand your company. You do not need to rely on parasitic behavior to accomplish this. The possible end benefit is that you build more loyal customers. After having played my first game with IAP, I will never buy another.
I loved shareware games back in the day. Being able to play a substantial portion of the game for the price of a stamp and a floppy disk pretty much guaranteed you would want to get the whole thing if the game didn't suck.
I did pirate a few games back then but the majority of the games I bought at full price were shareware.
I don't understand why this business model doesn't seem to exist any more. Just throw a demo of your game onto a torrent website and make grabbing the full game as easy as possible.
Even on Steam there are hardly any playable demos.
If you're on a torrent site, why would you download the demo instead of the full game? Even if you were planning on paying for the game if it didn't suck, there's no advantage to neither you or the developer in downloading the demo instead.
Some of us still don't enjoy downloading 5 gigabytes just to try a game. Granted, this makes crafting the demo a little harder than putting in an unlock code.
As for torrent sites - demos could easily be distributed separately from full games. Companies could even have private trackers, though they might want a custom installer for that.
The second you start treating your customers like cash cows, the faster history will forget your game. Make games that are fun to play, charge enough to support yourself and expand your company. You do not need to rely on parasitic behavior to accomplish this. The possible end benefit is that you build more loyal customers. After having played my first game with IAP, I will never buy another.