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That doesn't make sense. That's not even a business model. If they offer everything you say they do, why would people care to pay for upgrades? Also, why would the paid people continue to pay when they see all this stuff being given away for free?
The domain was registered in late May of this year, the server is only hosting 15 domains, and the server's located in the Netherlands. It's a recipe for failure if you ask me. They won't last long.
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Agreed. If people need anything more/better/higher, they'd usually just switch services, or ultimately go fully commercial. A lot of them usually switch to forced ads after getting noticed and registrations for something such as "no ads" or obscenely high numbers they can't even guarantee to even paid customers. Call it hypocrisy. Small hosters can be AWOL quite often too, so bummer for "quality 24/7 support"...