They are doing no such thing.
At 99 cents per month, they are targeting people who want things for free, hoping that they can later up-sell, or convert them to a higher plan.
Don't know how well this is going to work in the hosting industry - usually the lower the cost, the worse the customer is.
I'd like to say maybe as someone on the 99 cent plan sees that they need more resources, they could click a button and get on the $9.99 plan, but that might be wishful thinking, and they are just opening themselves up to an enormous drain on resources.
Either way, if there is any indication of people signing up for this, all the other hosting companies are going to match this plan within 24-48 hours, just like they did when everyone switched to "unlimited" offerings. It's a race to the bottom.