With their (current) control of the main docker index and namespace, they could have stuck with a simple GitHub model (pay for private indexes) and would have been fine. With the community goodwill that they had, it would have been impossible to compete with them.

The reason more people aren't paying for private indexes at this point is because the service is still slow and unreliable, and the UI needs serious work. With their current funding levels, fixing those items shouldn't be a problem. For comparison, Quay.io was able to do it with just a few engineers.

They're just being greedy and overreaching at this point.