When a region is offline in a traditional grid it is completely inaccessible. You can't just teleport in and see it come up.
You have to manually restored it to the grid.
Kitely's on demand regions are always accessible. I don't consider them to be in "cold storage" but more like "warm storage."
If I downloaded my Kitely region to my home computer, then deleted the version that was up on Kitely -- that would be cold storage.
Or if someone stopped paying their Kitely bills and the Kitely guys took all their regions and shipped them off to whatever Amazon's equivalent of storage Siberia is, to sit there until the bill gets paid.
That's cold storage. You can't just teleport into the regions and expect them to be there. You have to manually bring them back, by uploading them again, or by paying your bill, or whatever.
Kitely's decision to keep free regions active and available is their issue. At some point, if there are too many of these for Kitely to afford to keep live, they'll ship some of the older ones off until their users re-activate their accounts.
For example, there are grids out there with empty regions up full of land plots, waiting for new users to show up and claim them. Sure these are unused regions, but it costs the grid to keep them up, and anyone can teleport in at any time and use them.