Yes, quite correct. However, in class B & C airspace (and in the 30NM veil around class B, mode 'C' is absolutely required in the USA.
Someone mentioned to me today that mode 'S' would be required in 2004/5 in class 'B' (USA), can anyone confirm? This may actually be a good idea as ADB-S works good, at least so far. Perhaps some tech types here can speculate/confirm.