I find the pricing structure surprisingly similar to Hetzner Cloud. There are the same RAM and CPU core tiers running the same AMD EPYC 2nd Gen (one to one and onto mapping). Except prices for storage is almost double. And hourly costs are higher which is kinda hidden by not assuming 24/7 operation compared to Hetzners monthly pricing. You will pay less with Hetzner as they also offer hourly billing. More smoking gun…
What would be wrong if they're reselling Hetzner? Obviously the price difference come from whatever they include on top.
In my eyes, a pretty good option would be to automate VPS provisioning and allow each client to order a particular amount of resources, with the software installed on top of them. That way, multi tenancy can be limited to services that handle provisioning, billing and setup, while the individual instances can allow avoiding a single point of failure as far as the day to day operations are concerned.
Basing pricing on the underlying VPS costs with a profit margin in mind just seems like one of the few ways to do it, why would there be anything wrong with it, if the SaaS provides value?