The pay only what you use model is nice when your revenue also scales with use. For my projects I wish there were plans with higher fixed cost and risk only in availability and not in cost.
The only downside with that I've found is people and orgs tend to overestimate their future usage of X across the board, so profits rarely match expectations with pay-as-you-go, and tier-based pricing will easily overcome you by capturing more $$ from the market. Some notable exceptions are things like file storage where people tend to underestimate what they will need I find.