HOW ARE APPS MAKING MONEY?

I was wondering if you could clear some things up for me regarding monetization. I have been researching the topic for some time, and still feel a bit confused as to how applications hope to make money. So far I have gathered:

-Advertising revenue (adwords,etc.), with the extremely low cpm’s, will not provide any real revenue stream. Will this always be the case? Why?
- The “in-app” ad networks (lookery, etc) will allow you to cross promote your application, or you can promote other apps for profit. This requires you to have a large userbase in order to create real revenue, correct? What kind of money can be made here?
-Subscription-style add-ons: charge a small fee for virtual goods (like $1 gifts idea), or a small fee/subscription to use enhanced features of the application
-Sell products or services (from an existing business) to your users. (facebook lets you keep 100% transaction revenue, at least for now)
-Sponsorship (again with a large amount of users)