The downgrade makes sense depending on how much of a gap there is in price. If you really don't care that much about ads, then you cut your price in half with Hulu by downgrading.

Netflix is even more expensive and is likely the most expensive service people own.

So if you don't care about ads, you cut your price by more than half. An money concious person is going to realize that over a year that's a nice chunk of money. Hell you can talke the savings from the ad tier and then get another serivice like Hulu on ad tier.