We pay for Pingdom's service because:
* our time is precious, we'd rather not do it ourselves.
* we don't want to be monitoring our monitoring tools to make sure their work.
* they provide a lot more features (reporting, API), which we actually need and use.
* Pingdom measures response time and availability from multiple points on the internet, which is very useful for working out if there are issues with your connection.
* Pingdom will alert you of downtime even in the case that there's a catastrophic failure of all your monitoring.
Both of these things are useful even if you're a big company with a lot of internal monitoring.
This is the simple reason why the majority of people buy things. Why does 99% of the population go out and buy their fish rather than go down to a stream with a rod and a tub of worms?
I don't have the skills and resources (IE time) to either code my own webapps or to rely on open-source tools, despite how much I would like to. So when I have the option of, if something goes wrong, saying "Hey, I paid you, what-the-hell?!" I don't take this approach with computer maintenance and networking as I can handle that in my sleep, I can't handle my server-monitoring worth a damn. As I'm not up-to-date on any open-source server-monitoring tools, I'm always going to be at a loss if I try to set it up and don't care to keep up to date.
Similar questions can be asked as to why HN users, who are likely more pro-organic than the regular population are paying for something that is free and easy to do. I've grown organic, pesticide & fertilizer free herbs and vegetables, so why doesn't everyone else? Because to me it seems as simple as pushing a seed into soil, but I know people who have difficulty in keeping a cactus alive and would by far prefer paying for their organics.