Ya, setting aside any judgement about what's "right", this strategy doesn't seem profitable. There's no real moat between one model/provider to another, switching is relatively easy. I don't understand how this is supposed to work for them.

It strikes me as similar to UPS / USPS / Fedex -- everyone uses the mail, and they mostly use whichever is cheapest for their requirements. I don't think there's much loyalty to specific services, and people are happy to switch between the options