It was free for 10 accounts. The number one massively applicable use case vs plain google accounts was vanity domain names and signing up was no harder than creating a regular gmail account. There are probably more vanity domain users than small businesses with 10 people. In fact I would venture to guess with the 10 address limit they are nearly 100% of the remaining users on the legacy program.
The cost of the domain name is $10 per domain per year or $1 per person per year little enough for one person to pay without thinking.
Most people keep an email address for a very very long time rarely switching unless a service ceases to exist.
Almost no domain owners are going to pony up $720 per year themselves and collection from other users will be an untenable hassle.
Basically every bullet point you listed is wrong. The remaining pool of users is likely 99% vanity users who would have used Gmail+custom domain forever at no real cost to Google over free Gmail none of which will migrate to Google workspace.
For Google the gain from this change will be identical to picking n random Gmail accounts and canceling them and keeping those users digital purchases as a giant fu.
Not ruinous but hardly profitable either.
Someone with an ounce of sense would have included the option to migrate all email accounts to regular Gmail accounts.
