Shock, i think this is a very nice idea, however i don't think this will work out.
I agree, most of the Playerbase has left, and this has hit me especially hard because the last i saw of my friends was in beta 1.02c.
In my opinion the only reason people ever played SFD before Steam was because it was free. I mean i didn't even touch the map editor for a whole year, until i got bored of official maps. I haven't played the campaigns yet either, even if i have owned the Steam version for more then a month now. I mean there where some great adventure maps back in the day. And since i (and some other people) used to play the game competitively we never really cared about how we looked as it did not improve our performance anyway.
But now with all these weapons added and limitations to melee and whatnot i think that part of the serious Playerbase is kinda gone.
I might be pessimistic in my thinking but using your idea, i think sooner or later the free servers will pretty much dominate all of Superfighters Deluxe again, i mean people would still be able to add custom maps made by other people. And if they want all of the cosmetics they are going to pirate the game anyways.
If you on the other hand remove the free servers and make it possible for free players to only join paid servers, so that they can get a glimpse of all the cool cosmetics maybe there will be a slight raise in sales. I mean the reason that there are no more servers is that people don't bother hosting because there is no community left to join in the first place. Therefore making the game free many more "poor" players will come back, and a few hosts can pay the money for the full version to host for the rest. Renewed interest in the game.
More people want to customize their character to stand out. It'll probably help making the game cheaper (no offense).
Making the free version locked down:
1. Unlocked tier 1 challenges, some of Tier 2 and 2 Tier 3 challenges - no cosmetic unlock. Limited customization.
2. No solo bots (people will play alone like SF 1) offline play, and no free severs - as this leads to isolated community.
3. Maybe keep local multiplayer for 2 people though? - This will create frustration for cue-waiting when people realize that you can play 4 player in full version...
4. Unlocked tutorial
5. Can join full version severs - maybe with a time limit of 30 min. (don't know if this would be possible, but it will force a lot players to buy the game).
6. Map editor with locked down features - creating very simple maps (optional)
But then again, the first problem to fix would be the pirating, as that ruins all of the effort of creating and spreading a free version.
And yes i think free weekends with everything unlocked will create a lot of interest, as there is nothing to loose to try the game out.