It just doesn't make sense to me!   

If they've got these plans, they should surely remove the £5.99 paid app. Someone might be browsing and think they're definitely into caching, so will invest in the paid app - typically, paid apps boast more features, the free ones are normally lite versions, so this is what many people are likely to do. Or, someone who has become addicted once using the free app may decide to upgrade assuming the paid one is better.

@Bear and Ragged, have you downloaded the free one to use instead? Is it worth it?