I guess $1751 / month isn't a big deal in developed countries. But in India this is a lot. Also if I include the RDS Read Replica in total RDS cost, it comes down to $2627 / month (~ INR 1.93 Lakhs / month). Here this is equivalent to 5 Junior Developer Salary / month.

Based on our current customer base of backup and restore solution with addons, AWS spend is about 12% - 16% of the total product revenue. Our company has about 5000+ Active Customer base where the core product offering is different. Backup and Restore solution is itself an add-on. If we would have priced this considerably larger due to larger RDS spend, then it won't be surprising even if we get just only 10% of the current addon customers (700+).

Plus I would say this isn't a much complexity, everything is automated using Terraform and Ansible - pg installation, streaming replication setup, ZFS RAID0 setup, etc... Not a single command is executed in our EC2 Instances manually. The only benefit we get from RDS is the failover capability with minimal downtime. But for that, x4-x5 increased RDS cost isn't worth for us.

We still use RDS for OLTP and service databases, but not affordable for the backup offering.