Someone comes and offers a great service that the market demands and no one is offering.

Because they are pretty much alone, they can charge a lot and have a juicy margin. They still sell since there is no competition.

Eventually, some ballsy entrepreneur notices the situation and thinks to himself: "I can do the same thing for half the price". And he goes and does it.

As more of these hungry entrepreneurs join the scene, competitions starts and the margins go lower and lower, translating into lower and lower prices for customers. The starting guys can't keep charging the fat margin anymore.

So, don't stress out and just give things some time. Phoenix is charging what they charge because they can get away with it, until competition joins and they won't be able to. And the hefty fee is precisely what's going to make all of it possible.

Finally, I find it hard to see how they are killing the purpose of using LN. I paid 2342 sats for my coffee this morning with Phoenix and the fee was 12 sats. That's clearly much better than what I would have had to pay with an onchain transaction, so I feel the purpose of LN with Phoenix is very much alive.