Yeah, it's more of a "highest bidder mentality". That they don't have any experience with hourly billing should have been a massive red flag as that means they need to be very conscious in how they approach the project. That they used this simply as an excuse to deprioritize the project is what caused the problems.
Your conclusion is completely at odds with this quote from the article:
> WebAgency quoted the highest rate of anyone I interviewed, but their portfolio best matched the style I wanted.