Yes, that absolutely works -- if you have a site where not being able to send people email doesn't diminish the value of the site (e.g., Hacker News is fine without confirming email addresses; but for tarsnap, I need to send people emails saying "hey, if you don't deposit more money into your account in the next 7 days, your backups will be deleted" -- so for tarsnap, confirming email addresses is essential).

As a user if I am actually going to give you money, I would think your service was worth giving my email address out for.

On the other hand I have properly signed up for more than 10 times as many free services as I pay for.