I think you ought to play these games more times, and google for how such game is done. Like @menyo said, it's procedural. Accurately speaking, Tiny Wings is procedural graphics, Jetpack is just randomized sprite placements.
Jetpack is much easier to do. You define your endless (well, might not be really endless, just very long) run with obstacles at intervals. Use obstacle sets, each item in the set has the same difficulty. Place set - interval - set - interval. And when a set is encountered, you place sprites by randomizing obstacles in the set. You can draw up a map using xmind or something to figure out the hierarchical structure of the scene.
Though I should mention that there are already way too many games in this genre. And many of them are in 3d, and have extremely strong graphics, such as Rushing Alice. It might not be easy to gain tractions. And if you think about it, Temple Run is in the same genre too.
What are the incentives? Are you aiming to create the next silicon valley? That'll need a lot of money, and politics.
A mere piece of land isn't good enough. But what if, say, if you build a game company there, it'll be tax free? Better yet, all game developers get 50% discount automatically at all supermarkets there. Or, if you came from another place, and try to settle, free house.
But I figured even the homeless wouldn't want to come to a town full of shelters. So a clear objective is important.
Having said that, I think the important factors are funding, and government backed policies.
Most RPGs have linear story lines. I recall several articles I read mentioning alternative paths are designed for replayability (or replay value). And if you look at games like World of Warcraft, its character race design is very typical. It tells the player that even after you get bored with your character, you can still create a new one as another race to get a new game.
I also recall reading from somewhere that games should not be like movies. The view argues that a game should be more of providing an interactive decision making environment to the player, and less of just telling the story. In that sense, alternative paths also serve the purpose of having more varieties, which makes the player feel like he's in control, rather than having to do something he's told to.
Nonetheless, I figure nobody hated Call of Duty because of its linear story setup. So if it's done right, linear story can also be great.
I agree with you on the point that freemium is only suitable for MMOs. If people and their friends are hooked together on an MMO platform, they are likely to stay and purchase power-ups.
The recent rise of freemium games seemed to have lots to do with the success of Farmville. In the old days, there simply weren't that many similar games. People didn't move from game to game because they didn't know there were others. But it's a different story now. Take iOS for example, you'll see its free game chart constantly moving. It's a very high competition area.
I tried purchasing coins in games like Jetpack Joyride, Chasing Yello, Rushing Alice. What I discovered is that these coins are pretty much wasted, and have no major effect on gameplay. They only makes you look better or luckier. If you look closely, the majority of purchasable items on iOS free games are consumables. Unlike MMOs, where you typically purchase for a permanent item, such as a weapon. And because in such small games, mechanics are too simple to be altered by coins. It leaves you the exact same feeling when playing with purchased items.
In a game like Jetpack Joyride, purchasable items seemed to be a part of the game design from ground up. But for most others, it's like a last minute job. They didn't think of why the player needs purchasing.
In the end, it's very difficult to keep the player hooked with a free version, and make him wanting more at the same time. There are a lot of well designed free games, which made moving from one to another an easy action. And to be successful, it's not about designing a good game. You'll have a better chance if you can reach the people who have the habit to purchase a lot of items even though they are useless.
There are quite a few games with this mechanics on iOS. To name a few, Jetpack Joyride, Temple Run, Agent Dash, Chasing Yello, Rushing Alice, Tiny Wings, Ski Safari. And there are others I can't recall the name, the one with gingerbread man, and the one with birds.
Most of them are free, with in-app-purchase based power-ups. And the operations typically involves jump and dunk only. And for Jetpack Joyride, Ski Safari, Tiny Wings, they only involves one operation. It's not typical to have something to "shoot at".
You can also consult Doodle Jump, which is constantly moving, but at controllable progress.
In the end, you are asking whether it's a good idea. I have to say there are already many hits in this genre. So people are familiar with it. How they are designed, I have to agree with @slicer4ever on pacing. Some games are bad because they are too slow or fast. But you have to play the existing hits to get the idea.