Of course they should compete. They should provide better value. That doesn't necessarily mean it has to be less expensive though.

Freemium applications usually have nothing between the free tier and the professional tier. I'd pay for a lot more services if there was a personal or supporter tier. For something like this, I'd pay $25 / year. That means every time I launch it, I'd be paying between ten and twenty-five cents.

Basecamp is another service that's worth about that much to me, but they don't offer a personal or family tier.