That's a lot to pay for 8-bit software these days, especially when rival OSes such as GEOS are free (and have more apps available).
That seems an odd use case; there are thousands of cracktros and other demos that could be used for that.
But you have to understand that GEOS is old. So even though it's free to obtain, it no longer impresses folks the way it did in the 1980's. Part of the fun in retrocomputing is creating and using
new stuff for old equipment. And C64 OS accomplishes that.
Scene demos are fun to watch, but there's no real interaction beyond that. C64 OS is not only interactive, it can actually be useful if you want it to be. Not everyone is content with merely watching demos and playing games. Some crave more, and C64 OS scratches that itch for those folks.
What type of new C64 software are you paying only $20 for? Game software? If so, that's not really a fair comparison!
P.S. Let's also remember how sluggish GEOS ran. C64 OS is fast because it doesn't rely on floppy disk loading and it doesn't need to draw graphics for the user interface the way GEOS needs to. This zippy aspect of C64 OS makes it very attractive, no doubt.