I don't want to address any one point in particular with this, because you all have valid points, but I do believe the rabbit hole goes much deeper, albeit not so deep we can't understand it.
Let me make a comparison, for a second. Algorithmix made a few Linear-Phase EQs that each cost $1,300 with free updates for life. I own the Algo Red, which is a really great EQ. Unfortunately, Algorithmix has all but abandoned it, and no more updates. The market didn't support the plug-ins, so they essentially (apparently) abandoned them. Waves offers a strong Linear-Phase EQ for less than half that, and when it goes on sale, it may be as low as $79! I bit. Waves will support it for a long time. The investment and income is there. But you'd think the appalling price of the Algorithmix EQ's, which Bob Katz would swear by as the best EQ plug on the planet, would cover the costs of updates for a long time.
Seriously, nobody wants to pay for some empty thing. WUP has nothing to offer aside from updates and admittedly, excellent support. However, if Waves is investing in new technologies all the time, as they are today, without WUP and people $500 plug-ins they'll go bankrupt or just never advance. There's a business model here. If buyers aren't partaking they'll have sales.
I can't totally discount the Waves business model, because it seems to work.
WUP is never required. You only need it IF you upgrade your plugins, or need support, etc. With that said, I also wouldn't discount something Waves does for bundle-owners who pay for WUP. Gold bundle owners received a FREE Vitamin plug-in to their bundle. There's an incentive to buy bundles for this reason.
Anytime you want something for less, there's revenue lost, and the company has to cover it elsewhere or cut corners. Hence, the very serious debates over whether Wal-Mart stores are good for local economies. People always want cheap, cheap, cheap, and free. But great comes at a price. My local mayor came under fire for letting Wal-mart build a store n my town. His reason was, "People will drive 20 miles to a Wal-Mart store to spend less. That town gets the millions in tax revenue that we simply don't see. Our town will continue going that distance, or we can build a store here and land the millions/year in that tax revenue. We have great local stores that will have to compete, but people really don't want the quality as much as they want to save money."
I don't like that idea, but it's reality. People simply don't want to pay for what they get, if they can "expect" to get equal quality cheaper elsewhere.
I'm certainly not a fan of WUP, but once you've been in such a hard, competitive business, it will make sense. Waves will still succeed in the market and people will continue buying their plug-ins and WUP for some time.
What you're getting in return is years of research with the engineers who admit they use their own signature plug-ins, because it takes them far less work to get an awesome mix than the previous methods using outboard gear. And all that outboard gear, not only isn't cheap, you can't get it in your hands (at all). Even though we don't want to pay for updates, and such with WUP, let's not pretend that these plug-ins and WUP are expensive to do pretty much the same (or more) work. I don't like spending $$$ on WUP, but I can certainly appreciate brankupting cost of buying all that hardware.
To finalize my previous comparison, Let's take for example, a Sonoris Compressor. It does a very fine job of compression of any signal, and you may find it way too easy to use. It's transparent and accurate. It does a GREAT job. Now compare that to the PuigChild compressor or API 2500 from Waves. These are relatively easy to use as well, and cost about the same, but what you get here is many, many hours/days/months or research and superb modeling techniques to get the "sound" of those hardware units. Many of the companies that offer free updates for life don't typically have the funds to engage in such efforts, and are left mostly with their calculations and experience in other areas.
Again, nobody can argue that free isn't better for the wallet, but is it truly better for the product?
All software has to be updated. Hardware does, too. How many would argue that a super-fast CPU at $400 cost is a great deal, something that will devalue eventually into nothing of value? I can buy one that gets the job done for half that, but at some point, I will have to buy updated hardware. It's an endless cycle. We don't pay for the support because we pay for the hardware. A new PC or Mac costs quite a bit.
For the WaveShell and CPU hogs, Waves plugins offline installer is very large. Having WaveShell allows your DAW to load the many plugins they have faster. If they were all separate, it would take longer to load them all for work. As for CPU, sure some plugins do soak up more. The IR-1 Convolution Reverb, for example is a CPU fiend. It gobbles it up. Many of the modeling plugins do, too as do the Signature lines.