Managed hosting - $29, you get your own server, app, automation, backups, and 24/7 support to make sure everything is working great
Centralised, multi-tenant application - $0-$9, you get no server. You get access to our app for your use. You cannot modify it or run any third party code.
We do managed hosting - and managed WP hosts... also do managed hosting. That's why it's a reasonable comparison point.
WordPress.com is not managed hosting. It's a heavily modified centralised multi-tenant application which loosely resembles WordPress. It does not run the open source codebase at all.