The consumer side cheap monthly plans exist for the same reason companies like Cloudflare and Vercel have a free tier: When it’s cheap and easy to get developers familiar with the tools, they will push their companies to pay the real money for those tools.
It’s a hard balance with LLM serving because you can’t really make it free. $20/month is close to free, but the $200/month plans are in a difficult place where they’re big enough that many small companies pay for $200/month plans for their employees and ignore the enterprise features you get with the full expensive arrangements. So the companies are continually adjusting the $20-$200 plans to keep them from being reliable options for businesses, which is where the real money is.
There’s a short sighted cheering on of the 3rd tier and lower companies offering lower rates, but we’re already seeing them ratchet up the pricing and keep larger models closed after they get market attention.