I believe there is a premium hosting market. I also believe that it is strong and big enough to accomodate those who are ready to compete on it. Let me just say that those who take their wallets out to pay for a $99/mo plan are quite educated, and they know exactly what they are buying. Even the least reasonable people might agree that a minimal research was made - its not that hard to type in "hosting" on any search engine to get a ballpark figure.
The difference is whether you are purchasing a Ford or a Maserati. Both takes you from location A to B, but Maserati does it nicer. If someone can pay $100 for a plan sold for $2 elsewhere, why shouldn't you take the money? Its all comes down to unique selling proposition. If you can convince and provide premium service/setup/whatever it is that makes your package worth $99 rate, then kudos to you.
Best,