This isn't a debate about the lock out chip.
Yes, I only really mention it as an aside because the inference (that lockout systems would benefit indies rather than locking them out as well) doesn't really ring true to me.
More topically, I do worry about where ad-funded games will end up going in terms of content. But if it's working for you right now and you aren't feeling your creativity impinged (at least no more than is necessary for commercial software anyway) then good on you.
In the Internet age anyone can pass a file around.
Which means piracy is trivial, but then so is picking up a virus or trojan. I do tend to think that people will still continue to pay for ad-free games from a trustworthy source rather than downloading god-knows-what from god-knows-where for free so, with the right rates, the portal system could continue to be viable. Even selling via PayPal from one's own site carries the advantage of looking reassuringly legit and, of course, there's the old nutshell of customers associating value with price (so if I'm asking £19.99 for my game then it must be because it's twice as good as that £9.99 effort and far superior to that free stuff etc). Hence I don't think the traditional revenue model is sunk just yet.