Bullshit. Free to Play was not prompted by piracy. It took over the industry via the Apple App Store which supposedly has the best piracy protection for game developers yet! Free to Play got a foothold due to the race-to-the-bottom pricing for moving up the charts of the App Store.
Free to Play is also the business model for the largest PC games (by playerbase), like League of Legends. It is being adopted in fits-and-spurts by the largest and most prestigious game developer, Blizzard. It hasn't totally monopolized the console games business yet, because they still care about their relationships with retailers, but I'd put money on it doing so within 5 years.
The dynamics of App Store discovery exacerbates FTP, but it clearly didn't uniquely create the viability.
Should be noted that it's not impossible to create a game with an FTP+Subscription+IAP pricing model where IAP has a strictly limited effect on actual gameplay and most of the core game is accessible either at the free tier or a modest subscription.
Usually, such games are still lower quality than the equivalent game with a shrink-wrap or subscription model, but the IAP infection is more like a festering sore than the terminal cancer described in the OP.
