What about a "lifetime" hosting for one-time payment? I have seen that done before from a number of companies.

Most of the time, though, there are positive reasons for following this strategy. Usually it is done so that the company can collect more cash in order to expand or improve their infracture in one way or another, or create a fund to market their services further.

Consider this: a company will provide lifetime hosting to first 500 clients for $250 each (most of the time the company will not offer refunds as part of promotional terms). They place these clients on a single server, but instead of collecting monthly payments, they raise $125,000 within a short period of time - funds they can use not to just sustain their current clientbase, but to advertise and grow.