Losing access to all the paid content of the game is quite a bit to be honest. Just saying.
Upfront costs can very nominal, depending on the plan, and what you want.New premiums can enjoy picking the packs, that's the encouragement to try the game, however, once deciding to stay we have to invest upfront to get access to the game.
In fact, it is quite easy (if a bit tedious) to get to cap without paying a cent, in fact, I saw someone that had near to made Completionst F2P, they were missing I think Druid, and Monk.
So opening costs of Premium are very minimal, and over the course of a year, on a reasonable Premium Account could be anywhere from 20 - 50 dollars for the year, to get most content packs. Where the VIP at their best days will spend around 99 Dollars for an annual, and the amount they spend will only go up depending on their other payment options.
So VIP's are not only continual payment in the form of monthly sub, overall they have the potential to be far more profitable to Turbine. Premium Piecemeal was a means to get players to try the game, and hang around with no obligations to continue paying.
To say one is better then the other, would be based on who you ask, and who has the numbers.
(Disclaimer: I would like to note that these numbers are entirely made up and have no bearing real or imagined upon Turbines actual numbers of which I have no access to)
If the VIP base makes up 10% of the player base but accounts for 40% of the games funds, it is far better for Turbine to Cater to them since they account for a much higher percent of money per account basis.
However, when you balance that to 90% of your player base being Premium and making up 60% of your funds, you can't afford to alienate them either, even if they are no where near a profitable on a per account basis.