That was my reaction too. People do but I'm not sure I understand. One thing, you could be much more easily on the hook for any copyright issue even if accidental. Also you're paying for a new service. I'd rather just occasionally do some local maintenance and pay the $2 a month extra to keep my machine running which I'd likely do anyhow.

Some people store their plex on a vps server, and plex recently banned the cheapest super popular one because some people were selling access to Plex servers on that host.

It's a very attractive option if all you want to host is Plex. What the average self-hoster pays for hardware + electrical would buy a lot of VPS time. It's also money that's spread over a longer period of time vs a large upfront cost.