So what prevents someone from bypassing the license check and run the version of application locally?
TBH, I wouldn't dare to use such a model in the B2C market, though. Everyone would pirate it.
More seriously:
- you get support by paying, this is important for many businesses - $1k/year is cheap
- risk of getting sued if the word gets out you're using something against its license (and for network-facing code, I'd suspect it's easy enough to miss something)
For me the advantage of source-available is you can always shortcut the support if there's a business critical problem and you can't wait for the author to wake up, so I think it's a great model.