I actually like it. You can try it out for a cheap monthly price, and if you like it pay the life-time fee of $877. It’d be analogous to trying the powerful 8-cyl gas car cheaply for a month before paying $877 extra for it vs the cheaper 6-cyl.
The difference is that going from engine A to engine B is a hardware upgrade. In this instance the additional power is already delivered and paid for, VW is simply offering a different setting in the installed software.
My truck has ‘sport mode’ and it makes a noticeable difference on acceleration, how long gears are held, steering response, etc. I just press a button. Same with a towing mode, the software tells components how to perform. No subscription needed.
It seems a greedy move by VW and I hope other auto manufacturers see this as a competitive differentiation (why pay for something you already have?).