And one reason it can “raise hackles” is incomplete descriptions like that!
OK, it’s owned two co-op-ish* organisations but the service is actually delivered by a series of very non-co-op companies (LogicBoxes among them), some of which have engaged in what I feel is rather sharp practice, almost as bad as the scammers registering domains to themselves mentioned above. Trying to get even basic technical errors with services fixed took a disproportionate amount of time.
Secondly, while there are some fixed overheads, there are also per-domain ones so surely running a registry for 10,000 names doesn’t cost more than for 10 million? Far less storage, network and processor required. When I last investigated, I was told that we were still paying off the setup costs from being one of the first “new” Top-Level Domains, but I don’t know if that’s still the case or how long it will take. We don’t have any visibility of the breakdown of that $100 yet, do we?
But a major problem is the registry being a registrar as well. That’s like being both referee and one of the players: it deters other players because it means there’s unlikely to be effective regulation of one of them.
*: as I’m sure you know, both ICA and NCBA are so large that some argue they are no longer under effective co-op control because there’s not enough co-op-to-co-op communication for any group to effect any change without a disproportionate barn-raising effort.