I don't follow the logic here or the bouncy castle analogy. A private repo adds more direct value to a company that has 12 devs than a bouncy castle (ok maybe indirectly it might make them happy and more productive, but its stretching a bit).
I understand the question of whether it provides value, and it would be sufficient argument if you are company with lets say ~50k/yr on expenses. But when you are spending (assumptions of course) 600k-750k JUST employing your dev team, I just don't see how this $1100/year is too much; esp when the cost is associated with a core aspect of your business.
We are not talking about renting a water cooler here.
They already have private repos. The new features are permissions and a dashboard. Those particular features might be nice to haves, but for many small or midsized dev teams are not "a core aspect of [their] business."
It's not unreasonable to look at the new offerings ad say "I'm not going to pay 5x for a dashboard and better permissions."
Some people will say yes. Some people will say no.
It's a little silly to say "Well, you're spending 600k-750k a year, you can afford it." They can also afford a bouncy castle.
The right question is--does this provide enough value to justify the cost? For the parent, no, it doesn't.