There are shared hosting providers around that price, including domain, that offer one-click WordPress installation, and WordPress-specific hosting options, so that exists in a slightly different form.

Non-technical people know about WordPress a lot more than they know about markdown, and technical people would more likely want to self-manage such an arrangement, so I don't think there would be a large enough market to make that practical (the margins would be low, even accounting for the potential for lower resource use per client than WordPress by using something simpler, so you'd need to sell a lot of accounts to make it worth-while).

> Why doesn't the domain registration entitle you to a single static 100kB page

I don't think enough people would want it to make it a key differentiator against competing registrars, so the extra admin (particularly dealing with occasional copyright claims and other legal issues, and a DDoS attack against a client every now and then) would not be worth it. Registrars are essentially competing on price and inertia, and will do nothing extra unless it brings in extra money or makes them look enough better than the next registrar to the average user.