Ok, firstly, let's have a look at the current playing field. Similar programs to Terragen 2 (namely Vue) do not cost more than roughly $650. So having an $10,000 version of the software doesn't make sense, as it would be *way* overpricing itself out of the market, and would never sell a single copy.
Secondly, if the maximum resolution in the free version is increased somewhat, there would be nothing stopping commercial companies from using it without paying.
Thirdly, a number of recreational users, many of whom are members of this site, have already purchased the Deep version because they saw the value in paying for the limits being removed. So, Planetside are already generating income from users who would have paid nothing if the limitations had been removed in your proposed free version.
Fourthly, I am pretty sure that the developers have worked in film and have an understanding of software value and cost. In fact, I do believe that the main developer works (or has worked) at DD. Myself, I have been working in film for over 5 years (with games and broadcast another 5+ years) and understand that just because a piece of software is great, doesn't mean companies will pay anything for it.
Fifthly, I understand your desire to want something better for free, it's only natural. Hey, I wish I could tell Autodesk to release a full version of Maya with no limitations, except for a res limit of 2k. Bottom line is you get what you pay for. If you pay nothing, don't look a gift horse in the mouth
The limitations are there to encourage you to buy the full version of the software.