Buying finished code which probably just needs a few lines changed for the port is most likely a lot cheaper than developing something from the ground. Add that consumers are stupid enough to pay for anything, no matter whether it has been free until a day ago, and you've got a nice profit...

A few hundred thousand dollars probably convinces the author though . Not sure why the publishing house picks it up in the first place though.

I've actually seen this happen (a former freeware game suddenly becoming commercial) a few times. Never quite understood that. If it was freeware, it's out there in masses already, so I doubt there's any real point in trying to suppress it being spread further at some point...

There is a two years old free game that is one of the best platforms games I have seen in a good time. Now it seems the creator, as apparently it was practically a one man labor, has sold it and it is going to appear in the Playstation portatile, so in case it stops being freeware I'll give the direction where the translated game can be downloaded:
http://agtp.romhack.net/doukutsu.html