You misunderstand. The point is that the more data they have, the more valuable and "accurate" their analysis is -- it's like crowdsourcing genetics by building one large database.

So your complaint of "why don't they just sell it at the cost plus a margin" doesn't work here. They're dropping the price because they're paying you for your information to make their service better.

It's like Tumblr not having ads (for a period of time). "Why are you giving this to me for free?" you ask. Because then you're more likely to use us, and then we'll have a bigger user base and make tons of money later.

That's how SAAS models can give away their "service" for free and still be valued at billions of dollars.