I think it's a good deal for third-party publishers and Sony both.
Let's use Borderlands as an example. At the point in its life-cycle that Borderlands appeared on PS+, it had probably stopped selling at retail in any meaningful way. The only way copies Borderlands would move would be the $5 sales on Steam--which it had, more than once. Console sales, however, had probably stopped. Moreover, the copies that had already been sold to brick-and-mortar were just that, already sold, which means Gearbox wasn't going to make more money from them unless more copies were ordered. At a certain point, the profit earned from selling cheap physical copies is very, very low after all parties take their split.
In that regard, cutting a deal with Sony almost certainly made more money than the trickle of sales Borderlands would see otherwise, not to mention the stray DLC purchases. In addition to that, there is also the way the game appearing on PS+ as a "free" game promoted the franchise and likely led to higher sales for Borderlands 2. Think about it, isn't cutting a little off an already cheap game worth selling more sequels at $60?
As for Sony, the real value for them are the discounts. Again, Steam is a good example. They strike a deal with the developer/publisher where they both take less profit per sell, but that loss on margins is more than made up for in volume. Unfinished Swan, for example, rocketed back up to the top of the charts when it had its turn at a discounted price. For small developers, it's also a great way to build your fanbase for future projects. More people playing your game means more people will like it and possibly become interested in your next project.
I also don't think the "people will wait and spend less money on new games" argument holds much water. First, if people really want a game, they aren't going to wait a year for the -chance- that it might appear on PS+. If they're waiting, then they're probably waiting until it's at bargain bin level, in which case, see above. The idea that someone with PS+ might not buy new games as often has a bit more merit, but I think the impact would be minimal. We only get a couple of new games a month and, more often than not, even if a member likes both, which is probably rare, I doubt those two games are going to keep someone occupied for weeks at a time to the point where they skip a new game they wanted.
The ultimate margins might be slim, but I think it's a profitable system all the way around. More importantly for Sony, it's a deal that fans like paying for rather than feel forced to pay for. Members feel like they're getting a good deal and thus end up as happy customers and happy customers are invaluable.
