During episode 62 of Hypercritical, John Siracusa pontificated the reason, motives and solutions to the lack of paid upgrades in the Mac App Store. During this particular ramble he dismissed separate apps for major versions as confusing and a bad user experience. His reasoning was roughly as follows:

1. Multiple app versions are confusing when presented haphazardly to the user such as in search results.
2. Removing old app versions reduces this confusion, but also eliminates their only vector for updates.

These are valid points. The present scenario is indeed quite broken, but not irreperably so. The solution is fairly simple. Just allow developers to un-list apps in the App Store. This would allow existing users to see updates, but prevent new users from accidentally stumbling upon and purchasing previous app versions. The developer could even provide a direct link for legacy versions when they deem necessary.

As for simply adding paid upgrades to existing Apps, picture the following scenario: Our [insert relative older than 60 here] purchased “Generic Picture App” 9 months ago. They have been recognizing and installing updates as presented by the App Store regularly and everything has been going along swimmingly. Then one day the developer finally releases the major version update: Picture App 2.0 – Now With Sparkles! What should our beloved relative see on the update screen? The update could–

1. Display with a price, effectively making it an ad that wouldn’t go away until purchased.
2. Be ignored which would effectively treat this update as a new app.
3. Create some new mechanism to indicate that this particular update is different from those previous updates, thus confusing the hell out our aging relative.

With each major version being a separate app, our dear relative could rely on the update screen to only provide free updates applicable to the software they purchased while providing developers with the means to update older versions with bug fixes, security patches, and of course a variety of methods of informing our sweet relative of their latest sparkly version.