Hosting is only one part of the job
A hosting account provides the infrastructure that serves the site. Domains, DNS, SSL certificates, deployments, backups and ongoing technical fixes may be separate responsibilities depending on the provider.
Cheap hosting can still be perfectly suitable
If you are comfortable managing the technical details yourself, a low-cost host may be all you need. The trade-off is that you become responsible when certificates expire, DNS changes or a deployment fails.
Managed service is mainly about convenience
A managed website service bundles the infrastructure with someone taking responsibility for it. You are paying to avoid dealing with maintenance, monitoring, backups and routine technical problems yourself.