This absolutely works, and was the key selling point for Rackspace when I worked there, "Fanatical Support". Unfortunately it got purchased by private equity and subsequently ruined, eliminated almost all US staff, and offshored everything to India, and this included a rebrand to remove Fanatiguy from the logo and the "Fanatical Support" promise.
While you /can/ make a premium offering with competent support as a competitive advantage, the most short-term profit to be made is then to buy that company after it's established a brand reputation and burn that brand reputation as fuel to produce extra profit until it becomes worthless and anyone who held your stock previously is left holding the bag.
That's a real shame to hear. Many years ago I took over the running of a website that was hosted on Rackspace, and their support really was great. We rarely had problems, but when things did go wrong they always resolved it really quickly.
While you /can/ make a premium offering with competent support as a competitive advantage, the most short-term profit to be made is then to buy that company after it's established a brand reputation and burn that brand reputation as fuel to produce extra profit until it becomes worthless and anyone who held your stock previously is left holding the bag.