Maybe I'm missing something but it raises a red flag on my end, going from "here's what we have now" to "you gotta pay to see my collection"
For argument's sake: perhaps he thought having the Paypal tip jar alone would generate the revenue necessary to keep the site going, and realized later a more formal system would need to be in place? Perhaps he underestimated how much bandwidth the site would consume in its "free" form? You see the theme obsessives all over YouTube, and they must have racked up the plays on some of the cues. Perhaps he wanted to attract more music to the collection (and site) by having a private tier, and ensuring those contributing that the site was legit, both in license and in security. That's just the start of my "perhaps" sentences.
There's virtually never total transparency when it comes to how your money is spent: business, charity or otherwise. But I get the feeling, with all the time and energy spent on the site and how the material is handled, that this is more a labor of love that he wants to share, and he doesn't want to be the musical equivalent of a YouTube channel whose reams of old game shows are taken down because of one click-happy lawyer. By paying to make everything legal, he gets to continue doing it, and continue growing the stash. My brow has been raised a time or two with the site and its announcements, but I enjoy what I pay for.
My opinion.
-Jason