WordPress (wordpress.com) provides a custom domain and an ad free blog for less than $20 (AFAIK) a year.
That's the rub. If you were running the service, just speaking practically, how many customers would you need at $10 / €10 per year to pay for the servers? How about to pay your salary? What if you wanted to hire one additional employee?
(Also, WordPress.com shows you ads unless you pay at least $36 / year -- and they're large enough that they could reduce the price to whatever they want, unlike a bootstrapped service starting from $0.)
But there's also the valid point you mention, which is that many people have no more than a passing interest in blogging, and thus might not value a blogging platform at more than the price you suggested. We see this happen with Write.as. But then it might actually make more sense for platforms to charge more -- think about if you were just starting out a workout routine. Would you be more willing to go to the gym regularly if you were paying just $1 per month for a membership, or $40 per month? An investment in the tool helps you invest in the habit.
In the case of Write.as, I see some points that seem weird to me.
One is the character limit in the pricing tables. I don’t know if anyone is going to look at that and decide which option to go for. The 100000 character limit in the lowest tier would probably be around 15000 words or so. That’s a very high limit for most blog posts, and is in the long form article territory. So I don’t think that anyone looking only at character count for a blog would need anything more.
The other part is not having a price tier between $12 a year and $60 a year. That’s a big gap if you’re focusing on personal blogs.
Lastly, on the point of the gym membership comparison, I’ve heard this logic of commitment being tied to loss aversion. But I’ve practically seen it work badly (not as expected at all), and resulting in more loss aversion that prevents people from signing up for anything with a larger commitment next time. That’s just been my observation.
This looks more modern than blogger