It only works well if you have a decent amount of large enterprise customers (like RedHat); I don't think it will work out well for GitLab, which is mostly aimed at small-to-medium businesses. I don't think it's viable for most projects (otherwise they would be using it).

Even if it is viable, you're usually leaving a lot of money on the table, and even Red Hat – the poster child of this model – does stuff like releasing updates to paying customers first.