All monetization is, at the core, a value proposition. You offer me a thing at a given price, then I decide whether the thing is worth it to me to spend the money to get it. There are things we can do to adjust this perceived value, but there is no coercion involved - the buyer always has the option of walking away. The closer the value proposition is to the edge of what is acceptable, the "harder" the bargain feels. The more value the buyer feels she is getting relative to the cost, the better a deal feels. In my opinion, ethical monetization is where all sides of a given deal feel like what they are getting out of the deal is "worth it".
This is observable in the vast majority of complaints about game-related costs - the recent kerfuffle about Borderlands 4 possibly costing $80 to buy in, the price of specific items (e.g. EVE Online's famous $80 monocle), the price of DLC, and so on. We can tell that this is a pricing/value issue and not a principle issue because the vast majority of complaints about monetization are not about the monetization existing, but the specific prices involved. The vast majority of complaints about gaming monetization could be assuaged by lowering the price to a more acceptable level to that particular user.
We must realize that players are not monolithic. Some players must have the latest and greatest new thing like the players who preorders and buys the collector's edition or the player who immediately buys the latest DLC at launch. Some players are more value-minded and are willing to wait for a better price like the players who wait for a sale or who wait for a DLC bundle to come out. Some players are budget-oriented, allowing for only so much spending over a given time frame. Some players have their own specific favorites they are willing to spend on, like content for a particular character or a specific game mode they enjoy playing. There are also cultural factors, like how it is taboo in Western gaming culture to sell/buy power in game, or how Lunar New Year is an enormous sale times in Eastern gaming cultures. I will also point out that things aimed at one group may not be received well by other groups. In all situations, the opinions of the actual customers significantly outweigh the non-customers. This should be for an obvious reason - converting a non-paying customer to a paying customer is significantly more costly than retaining a paying customer.
Things will be "ethically" monetized when people can collectively agree on what "ethical" monetization actually is. Until that day comes, we'll probably continue the way we've been - we offer various things and we see if players are willing to spend. If enough players spend, development continues. If not enough players spend, we adjust and hope that we can make the value proposition compelling enough for enough players to spend. If not enough players spend for long enough, the game gets shut down and there's some combination of moving on to a new project or loss of jobs.
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