I always like having discounts that be offered from hosting providers or domain registrars, it save me more money when buying these services. The bigger discounts the better opportunities for them to sell services to customers.
Everyone loves getting discounts. But it is not advisable to initiate that if your business is just growing. Giving discounts is good because it brings in more clients but you just have to know when and how to go about it.
I contend that discounting past the roll out phase, or early intermediate phase, throws a certain stigma of faltering quality. I would look at a burgeoning company with a discount and say, "Cool, I understand they want to throw this out here to grab market share"...along the same lines, I would look at a well established company with certain limited discounts as a company that values competition and shows active customer/marketing engagement...a good energy. The guys that are in the middle, that have been around for about a year, throwing down deep discounts make me question quality. It's weird like that for me.
I believe the discounts are a way to attract new customers, but the loyal members of the hosting community shouldn't be forgotten. Usually, the discounts help to promote your hosting company, but it also allows the customer to save some money, so both suppose to win in this situation.
However, if the discount comes by default on a permanent basis then it basically loses the point. In such a case, why not just make the products cheaper in general and become attractive even more.
Discounts can obviously have both advantages and disadvantages. Personally, I think when you can afford it you should use discounts to attract a portion of audience, but you have to calculate it properly so you won't suffer losses. Having discounts is a long term plan for bringing MORE audience and eventually having extra profits.
It has to be done right.