Ukraine wants a $500/month service. Musk/Starlink wants them to be on the $4,500/month service and is complaining that they're "losing money" because they're not.
Oh, and they want to continue being paid for services for terminals that have been destroyed (because, y'know, war).
Given that the service operating in areas where there are no or limited groundstations available, this is actually more equivalent to the maritime service, which runs at $5,000/month.
It's reasonable for SpaceX to want to be paid for providing an essential service for a conflict that seems likely to be a lot more prolonged than initially expected. All this "extortion" thing has done is ensure that the next time someone asks for emergency aid from SpaceX or Tesla, they'll be a lot more conservative in their aid lest they get burned again. No good deed goes unpunished after all.
Operating like a normal company might give less PR, but probably wouldn’t have ended with Elon parroting Russian talking points …
Except Starlink has become critical for the military in Ukraine. It's used extensively to live stream drone footage from the frontlines to command locations over things like google hangouts. There's videos of this which is why we know. It also works without any infrastructure when it's all been destroyed has has been critical in getting cell service up and running quickly in destroyed areas.
Also time is of the essence during war. Viasat which had been the primary satellite communication method of the Ukrainian military was completely knocked out with many viasat terminals across Europe irreparably destroyed by Russian cyberattack when the war broke out.
Point is that there must be clear expectations and obligations on both sides to hopefully prevent stupid disputes and drama.