Where I come from it's called the fremium model. You get a certain set of functions for free, a set of functions which are useful within a particular scope. You pay for additional functionality. The company makes money when a certain percentage convert.
And it would only be "bait and switch" if Kitely was promising anything more than what you actually get. Say, they promise 100 hours, and all you get is six. That would be bait and switch.