A lot of them don't survive. It is not uncommon to see "fly-by night" hosters that are here one month, and can't pay the bills for the next.
That being said, zujee is right on the dot with the ad rev. and paid hosting. However, from personal experience, I can tell you getting a paid client when you offer so much free is dang near impossible. Thankfully, there can be some very giving users that will donate or switch to a paid plan to support you, and that is how at least I have been able to survive. Not make money though, just pay for itself. There is no money to be made in the hosting biz for the most part.