The main reason is you have more protection and guaranteed continual ownership of the thing (depending on the TLD you choose, of course). Whereas if this service shut down in 12 months time ... well it wouldn't be buckling any trends by doing so.

And if they shut down and let the omg.lol lapse or sell it, someone could then redirect all the subdomains to who knows what.

Another reason might be domain trust? If spammers use omg.lol subdomains the entire thing might be blacklisted for email.

Domains are easier to resell. I don't think there will be a secondary market for omg.lol and if you sell you business based on an omg.lol it will be a red flag vs. a top level domain.

On the other hand if you intent is a personal CV / bio type page, with email (you need fastmail too) and so on, the $20 is a great deal.

But I would rather just use a xyz.netlify.com for such a project, then couple that with a free email service.