It is a tough market and dilema, but at the same time people need to get a start somewhere. Especially when starting out.
I currently do TfP or even more shockingly, I even pay some models.
But that is also the level of my work.
I am probably undercutting myself at the moment, but at the same time we also have a scale in our heads when we look at more professional shooters work. Since I do a lot more fashion work at the moment, I will take a benchmark for me like Stephen Eastwood. Love the man's work. Not even close to his quality and skill. Granted, he also easily has 100x more experience than I do, if not more, so not really a fair barometer, but as well, I also tend to work with people that most Professional Photographers piss on.
I am trying to get better, I never plan to be a photographer as a profession, but I do plan to get to be a professional photographer. My distinction is I want to be able to shoot on my terms, create art when I am inspired, and do want to get paid, though I will be shooting far far less.
I have worked with a lot of new models, I have also worked with a few who have a lot more print and media and I hear a TON of stories about photographers who cancel last minute, treat the models and MUA like crap and there is the pervasive attitude of "I already have that in my portfolio, here are my rates"
Charge $100 for a wedding... Not for me. I actually hope I NEVER have to shoot a wedding. Have no desire to.
There is definitely "more" competition in the digital age, because it is much cheaper to snap 400 shots on a digital than it is to develop film, as well as it is easier to see what you are getting.
There is a defined hierarchy. The better models want to be paid, just like the best photographers do, and generally that means a client is in their paying the fees. Learning photographers tend to work with learning models and even there it is not a bed of roses since we have to prove more often than not that we are serious and not just a "guy with a camera"