If you want free, go Android. Apps plastered with ads are your new best friend.
Pirating is for kids. Most iOS apps are cheaper than dessert at a restaurant. Skip the cheesecake...
As far as "releasing software for free and relying on donations" goes ...LMAO! I have a little experience in this area. I have released several apps that I made for myself with the hopes that some other Mac users would find them useful. No, I wasn't in it for the money, but I did throw a paypal donate button on my site just to see if anyone would bite. Since 2007 I can say I have had 4 donations, one of which I refunded because they were interested in me adding features and I had no intention of spending the required time doing it. Didn't feel right keeping the money. All the other donations together totaled something around $25. The apps combined have been downloaded ~50,000 times from macupdate.com alone. I also had them listed on versiontracker and a couple on apple's download page so total downloads are quite a bit higher. Sounds lucrative, eh?