I think it depends on the baby. Mine started hating it around 2 weeks. Whenever I try it now she wiggles like crazy until she's free. She loves the sleep sacks though, I think she mostly didn't like her arms being restricted.
Ours hated being swaddled (arms in) once we got home from the hospital. He's been in an arms-out sleep sack ever since. Once your baby outgrows swaddling, you could try a sleep sack which is a little less confining. I think their startle reflex goes away after three to four months, so they're less likely to startle themselves in their sleep after that point (which swaddling and sleep sacks help prevent).
Mine is almost a month and he sleeps better when swaddled. I tried a sleep sack because he doesn't like his arm confined but he didn't sleep as well. My DS1 hated it from the beginning. It all depends on the baby.
Our LO never liked his arms swaddled even in the hospital. We just use halo sleep sacks that are essentially a blanket sleeping bag, and leave the arms open.
5 weeks and she still likes her blankets. We swaddle but with her arms out, she's been that way since we got home from the hospital. She just likes her arms to be free but loves to be wrapped up. One blanket she loves the most and always sleeps the longest with that blanket.
My oldest LOVED being swaddled and probably would still like it if he wasn't almost 2. We stopped when he started rolling over because I was worried he'd get trapped face down in his crib with his arms pinned in a swaddle.
We use the SwaddleMe Velcro swaddles with his arms out and he sleeps much better than when he's "free" but he definitely doesn't like them so we swaddle him before feeding so he can forget he's in there.
My first was swaddled until 6 months! She had crazy arms and it was a tough habit to break. This one will be much sooner as she sleeps about the same without it during day time naps.
Re: Swaddling
1999- Dx Prolactinoma
8-25-2012 - Lucas born via C-section at 38 Weeks 2 days