Why can't it be both? The level boost is an added "value" to the monetary expense of purchasing the expansion (at least for WoW which is where my experience is). Then, if you'd like to boost more characters, you have to pay more money. Obviously the goal is to get more players to endgame so they can increase engagement, but they're doing it because a fraction of the population will pay for it. They're rarely free w/ no strings attached from what I've experienced anecdotally.
Destiny gives you at least one free boost right? I'm actually not sure except 99.99 it is one, maybe more? Now they do sell the boosts for your third alt...maybe your second. The boosts dont go far anyway, I believe currently for Destiny they go up to the Forsaken campaign start, which means you've got grind a TON to catch up still, at least as far as unlocking all the activities.
I mean I think the debate is divorced from the monetization. If monetization didn't exist they'd still do it that way as a game design decision.
Destiny was my first MMO and I was the same way as OP at first. When Vault of Glass (1st raid) got deprecated I didnt understand it at all. New players would miss that great raid. Plus the knock on Destiny was "content starved", and here they were eliminating content.
Over time I started to get it, though. It's the same thing WOW does. What they market is the expansions. They dont want joe bob to think he'll have to level up for 5 years to even get to the actual expansion content, and so just forget it. It gets more unwieldy as time goes on as well.
Again it's not like it's an instant catch up. It's more like, grind for a few hours (like I dont know, 12?) and you'll be at a place to begin to experience the newest endgame content. 12 hours is like a whole single player campaign for most games.
And again a longtime player will have tons more gear, cosmetics, titles in Destiny's case, triumphs, the list goes on. I've got a gigantic stuffed vault. I'm not sure either if even things like the Black Armory forges or Menagerie will be unlocked by any shadowkeep boost? If not, that's more grinding to unlock that stuff if you want it.
I dunno, I still have a little bit mixed feelings on it. The way Destiny works I dont even know how they'd keep the entire grind intact though, even if they thought it was a good idea.