This is an excellent question. If you presume that the .FOO registry provides database services at a locked rate, the only variable rate is at the regsitrar. If a customer doesn't like the service from the registrar, they are free to choose another. If a customer doesn't like the service, they pick another.
Bad registrars go out of business in a hurry.
This also allows ISPs to act as registrars for their customers. Bad service means that they not only lose the yearly domain renewals, but they also lose an ISP customer. They can both provide good service, and they can both provide bad service. The only difference is in pricing. That is the ONLY difference.