"Cost" isn't a scalar where you can compare one source of capital against another of unlike structure (no matter what sophomore ec majors might say).
If you have a $1M term loan to Bank of Bankerton, and your payment this month is $100k, if you have a big miss in revenue (lose a couple major customers, switch billing models, big delay in onboarding new enterprise client) and can't make the payment, you're dead.
If you had the same $1M from a Revenue Based Finance deal, payable as, say, 10% of your monthly revenue (expected at $1M, so identical $100k payment due) but then had a huge revenue miss by say half -- well, you just pay 50k that month and stay alive to fight another day.
So -- to most small entrepreneurs without deep pocketed equity owners to fall back upon for a recap, the flexibility in a Revenue Loan can be an existential matter. What is the "cost" of that?
(Ps I'm partially being rhetorical and partially serious -- I've been working on a paper on this topic and would welcome a quant-y collaborator.)
First, I appreciate you qualifying the rhetorical nature of your post.
The costs and benefits are clear. It's more expensive than other options because is comes with additional risk. In the trenches you are forced to go beyond theory and compare apples to oranges.
Does it serve a practical function? Sure. I don't think that validates it as primary financing.
And what happened to organic growth and sacrifice?
It's helpful to be aware of the variety of options available for funding, but they are not created equal, and this carries a disproportionate cost.
If most companies were doing this I would consider it a signal worth investigating.