As an example, for a 0.027BTC transaction the fee I paid was 0.000164BTC which is comparable to the on-chain fee.
This is not possible as of now.
The 0.000164BTC is around $7 it is still high maybe the operator is asking for high transaction fees or maybe the fees he is talking about are the ones he paid for opening a channel.
LN transfer fees are way less and it can't be around $7 unless the transacted amount is a few thousand bitcoins which is unlikely possible to happen so yeah OP is confusing the LN transfer fee with the fee that he paid while opening the channel.
LN node operators set the base fee as less as possible and they are not doing it to make any financial benefits in my opinion.