Yes, but they make it back at renewal time.

I've definitely paid them back several times over for the domains I registered with them for $1.

You can transfer them using the next cheapest transfer coupon to another provider.

How many people actually do that though? GoDaddy's model seems to be like the banks over in UK - offer a great introductory rate (with a 'bonus' that expires after a year) and then allow customer inertia to set in.

The fact that you can switch and that it makes financial sense to do so does not mean that people will.

Yes. I'm just saying that nearly all their customers are profitable over their lifetime.