Our working hypothesis is that people fall into one of two categories (possibly both, but only one at a time):
a) Those who just want a simple to use LaTeX environment that just works for their task at hand.
b) Those who are more interested in the tech, and happy to install software locally, happy to explore things like git for collaboration and really refine their own personal workflows with the tools they like.
The paid plans are used by people in category (a) and would never be of much interest to those in category (b). But the self-hosted option is great for some people in category (b).
We also have a paid version of self-hosted ShareLaTeX, with direct support from us, and enterprise features like LDAP, admin controls for managing thousands of users, etc. The open-source version forms a natural part of this, (see GitLab, etc)
We (my small research group) chose it over Authorea and others because of this possibility and implication that we won't get caught in a vendor lock-in situation in the future.
Out of curiosity: wouldn't improving the self-hosting experience cannibalize subscriptions of your paid plans?