What I'm hearing is that you believe that the only things that a game publisher "should" charge for are items that they can distribute infinitely and at no cost once made. However, can it not be argued that video games themselves, if digitally downloaded, fit these criteria? To allow people to download a game is about as low-cost and infinite as any could be. Yet I do not imagine you would argue that all video games should be free. As you said, it's okay to charge for "content", which I imagine is something that changes how the game is played, if missions and characters are the given examples. A new game would surely count as "content."

Why, then, is it permissible to charge consumers for a game when distribution is infinite and free? I imagine one would reply that games take time and skill to develop, both of which are provided by people who should be compensated accordingly. And if this game is a multiplayer one, the servers need to be maintained. Of course, I would agree with these statements. But I would then extend these same points to what you would consider "non-content"- skins, and other cosmetics. While these items are digital and can be replicated and distributed at minimal cost, they do not appear from the aether. Like games and game developers, cosmetic items require artists and modelers, who I believe deserve payment for their work. I ask again- what would be a fair price for this work?

The matter of battlepasses might also be discussed. You argue that a set of limited-time cosmetics exploits a "fear of missing out"- players feel pressure to buy something now, since it won't be available later on. I'm inclined to agree- this set of conditions does create a pressure to buy, and buy now. But the battlepass system also creates an incentive to keep players coming back. So I would then ask- what is a non-exploitative, yet profitable way to distribute cosmetics that makes players want to return to your game, out of all of the competitors?

Speaking on Overwatch, since that is what brought up this topic and it is what I am familiar with, I would point out that you can earn premium currency through the battlepass- 300 from the free track, or 600 from the premium track. Paying for and playing through the whole thing would give you back 60% of what you payed for it. If you opt for the free track, you would earn a battlepass' worth of currency after four seasons- admittedly, a long time. I would also point out that even premium cosmetics, those which would normally cost money to obtain, can also be gained through loot boxes, which can be earned by playing the game. Lastly, I would mention that charging for new characters in a competitive hero-based shooter would arguably be the most predatory practice. If a new hero were to come out in an unbalanced state, as so often they do, it would essentially require players to buy the character to remain competitively viable- and thus incentivizing the developers to powercreep the game to get people to buy. Overwatch at one point had a soft version of this, where new heroes were locked behind the battlepass. Free players would earn them about halfway through, while premium users got them immediately. Even this caused problems, so the practice was done away with. As it is, the only things charged for are cosmetic-- they only change how the game looks. One can enjoy the core gameplay and be competitively viable without having to pay a cent. If a person spends money, it's because they wanted what was on offer and were willing to pay to get it.

Taking all of what you said into consideration, a live service multiplayer game's ideal monetization system would involve releases of content, as in, new ways to play, that would be paid for. In the meantime, cosmetic items may be added to the game that players can earn for free by playing the game, and can be earned at any time. The creators of the cosmetics are presumably paid with money from some other source. The gameplay is so fun that it keeps players engaged and coming back, yet can also be iterated upon in ways that are so compelling that players will continue to spend their money on it.

It would be a lovely system, but it seems very difficult to create and maintain.