In case you missed it, John Funk had a great article last week that compared the cost of playing an MMO to a standard single player game in terms of cost-per-hour. On that basis alone, most MMOs come out way, way ahead, and single player games usually can't even come close. A few big-time strategy games with high replay value might come close. Starcraft, Sims, and Civilization might approach the MMO levels of affordability, but aside from those, most big-name titles are an order of magnitude more expensive than an MMO. (And because I know someone will call me on it in the comments: Yes, we're well aware that Dwarf Fortress and Nethack are free and thus the "best value" from an hours-to-dollars standpoint. But let's focus on games on the shelves for now.)
But as anyone from marketing will tell you, shopping is an inherently irrational activity. With the right marketing, people will embrace a ripoff and defend the wisdom of their purchase after the fact. And sometimes people will pass on a good deal for reasons that have nothing to do with cost or tangible value.
There are a couple of approaches to selling time-based services. Long distance calls charge you by the minute, so you only pay for what you use. An MMO charges you a flat rate, and lets you use as much or as little as you like in a fixed window of time. Each scheme appeals to a different group of people.
Back in the 90s, America Online used the pay-for-time pricing model, which mostly failed. (For you youngsters, the internet wasn't always this omnipresent, George Lucas-styled energy-field to be plucked freely from the air around us. In the old days if you wanted the internet, you had to call it on the phone.) AOL used to charge per hour beyond a certain threshold. This meant your websurfing time was clocked. The moment you signed on, the meter was running. What do you do? Log off and back on every time you take a five-minute break, or squander your time in little batches? For some people, this created a psychological stress that permeated the online experience. Hurry! Clock is running! Finish reading this and move on!
Many people - myself included - switched over to an unlimited-use program as soon as they became available, even if the total monthly cost went up. It was an irrational move in terms of money, but web surfing was more enjoyable when you didn't hear the ticking clock in the back of your mind. The extra money was more than worth the peace of mind that came from knowing you weren't going to rack up massive penalties if you forgot to sign off before you went to bed. Slow-loading pages were still annoying, but at least they were no longer running out the clock on you.