"Are there not sufficient free open source tools to monitor your server and mail you when it goes down? Why would some of those big ticket customers ever pay for something like this?"

You're trading money for (someone else's) time. I could build pingdom for my own services, but I don't want to. I'd have to build it, scale it, maintain it, and monitor it.

I'd rather pay someone else to do it for me, and I'm technical.