You may not have paid close enough attention to what they were offering (or you may just have some shitty providers in your neighborhood).
First, a shitty provider would be offering the equivalent of block-time. You pay a recurring amount each month and get time in return. That's of no benefit to you of course.
Our "pay be the month schemes," by contrast, include all-you-can-eat support with generous SLAs, remote monitoring and management of all of your hardware, remote patching and A/V management, back-up and disaster recovery, and, oh yeah, the server.
When we sign someone up we build an entire new environment for them, a minimum of three servers (RDS, DC and BDR) with provisioning on our Exchange server and the SAN we use for redundancy. You get a modern server architecture with a fully redundant back-ups that can be spun up in under an hour into a full production environment.
The equivalent in hardware and labor would run you ~$20k and we do it all for the price of a three year contract. Oh, and if/when you renew? all upgrades to architecture, OS and supported titles are covered under the ongoing contract. You stay up-to-date in everything as a feature of the service.
The reason people do this is to put some predictability back into their IT. In the old way of doing things, and we were around for this, a client would suddenly have a server die and they'd be presented with the option of dropping ~$7500 or just doing without. Hope you didn't actually need that server! And that applied to every computer in the office of course. Got an IT budget that can replace all of the machines in your office? Neither did any of our clients... With the service we offer you don't even need PCs. You can use thin clients that cost a fraction of what a new PC costs since all of the heavy lifting is done by the server we built for you.
Last thing - what you don't see, behind the scenes on that arrangement, is the fat checks that the IT company is writing every month, to Microsoft for licensing, to the data center for hosting, to the RMM provider because they don't sell their stuff either, to the spam proxy, to the A/V vendor, and etc. and etc. all bills that you don't have to pay any more.
See why some people think it's a good deal now?