I've been looking into purchasing domains through some of the major registrars.
One common theme which strikes me as odd: purchasing a domain for a longer period incurs a higher per-year cost.
One explanation is that by paying more earlier, you're gaining protection against the risk of renewal fees being increased in future. However, this doesn't seem plausible enough.
Your explanation is quite plausible, actually, since the only prices that go up over time are the ones that are currently discounted. The higher prices for longer registrations take into account the fact that when the user renews, it will be at a higher price. The initial low price is just to get people to register with that registrar to begin with, since changing registrars is a monster pain.
They're also covering the rises due to inflation; you'd expect that most things bought five years from now would be more expensive than today, they're just taking that into account.