Granted I haven't given this a lot of thought, but the obvious ways Google makes money from accounts under one of these domains is: selling your information to partner companies, including things like location info all in support of their ad and user metrics business; providing ecosystem services like the Google Play store, apps, videos, books etc,; providing add-on storage services - you can pay for more email storage if you email address is under the custom domain - it's not like there are no add-on services upsell options for those who need it. All these things are available if you have just a gmail account, and it's a profitable business for Google. The only value add for Gsuite is just the DNS and mail server mapping to direct emails to the right accounts, which is configured as self-service and fully automated. I do think that's worth something even if it is provided at negligible cost to Google. I am sure someone has figured out much more than this, but the point is Google, Facebook, etc. aren't 'free'. Google isn't the product here, the users are the product. Pushing users away is bad business for Google. Saying that Google needs to boot off the freeloader because it is a cost to them is actually the opposite of how Google makes money.

Like a lot of folks, I host my email domain for my family on the legacy Gsuite. Google's pricing and packaging appears to assume Gsuite users are all business users. I primarily use the service for my email, but will use other services from time to time - sharing documents, using the calendar etc. It's not without value, but considering the only value added with the legacy Gsuite vs. a free gmail account, $6/mo/user is too steep. They should provide an option that aligns better to the 'family domain' use case. This is just serving to drive users away.