AFAICT this is exactly it, they were very very cheap. And so they captured a lot of domains, and if you asked someone about getting a domain it was "oh I got one from GoDaddy it was cheap, the service was bad but what do you expect?" and lots of people had domains from them. Then they started raising their prices until they had a nicely profitable business. They had become "established" and they continue to use name recognition to this day to attract business from people who either don't want to, or can't, shop around.