Any money you make from fares is another source of money that can be used to run more service and make the network better. The vast majority of your riding population is not poor and would gladly trade a little money for better service. (if the vast majority of your riders are poor you must be running really bad service)
The free circulator network is made better by the sheer number of people riding it, not the revenue it can bring in.
Firstly, more people riding circulators equals more stimulation of the economy, via shopping and event-going. People getting out of their homes and out of their residential neighborhoods is an overall good for commerce.
Secondly, I believe that one of the issues for collecting fares is the reluctance to create a new tier. Because the circulators are not full-size, full-service bus routes, they would necessarily need to charge less fare, and setting that up and maintaining a lower fare tier is labor-intensive, and requires a lot of education of the public. If a bus runs around the neighborhood with EXACT FARE REQUIRED and people are out of quarters, well they're just going to forgo riding that bus. If a bus is fare-free, and gets them into the full-fare zone, they're going to go for it.
