Nah not necessarily. It can be a great way to get money early on without venture capital.

Yeah, you will have to provide the service to them forever but they are usually a small bunch so they aren't a big deal if you manage to get big later on.

I suspect most companies that offer lifetime even when they are big have statistics showing that they lose little money or none because the high price means that the average consumer won't use the service for the required amount of years to break even.