Wow....that is just INSANE. $16,000 over less than 2 years for a Facebook game? And one that he doesn't even play anymore? Someone needs to see a shrink.
"There's a sucker born every minute." P. T. Barnum
Care to look at Korea? Nexon was the general driving force of F2P, especially when it came to North America. Sure some I'm sure dabbled with the system, but when others seen it's success? No surprise that everyone jumped on board, especially the general casual game genre.
Sub-based was the norm until F2P made a huge impact. There are people who spend hundreds, even in black market forums over game items. Be them hacked (duped) items or something really one of a kind, there's always someone wanting to buy them. To then fill out multiple characters.. you can see it becoming a huge business. Then include the actual in-game bonuses of extra gold or exp, mainly in the MMO market of course it's thousands spent.
You see people easily spend $100+ for things. I'd direct you to Nexon in North America, for the general high price of things. There's been things from $1 to $100 and people buy it, without even so much as a second glance. I'll admit my own personal spending was high, nearly $5,000 but that was across multiple accounts for 6 years. So that's more of a general casual to someone, unlike those who would spend that in a few months time.