I think we may be talking about different worlds here... (And FWIW, it's $99/mo for the server and $10/mo for the off-server backup.) Any sort of higher end VPS tends to run around $80-$140/mo - especially places (look around at places like rackspace, mediatemple, Joyent etc). Dedicated servers can run quite a bit more. FH's cheapest dedicated server is $130/month. If you go look at webhostingtalk.com, even the small fly-by-night places charge you around $70 for a p4 with 1GB of RAM and one hard drive. You can get an Atom box for less if that's of interest...
To us, approx $1/day is worth it to avoid the risk of someone else impacting the performance of our website. A VPS would have been fine if we had dedicated storage or only had 1 or 2 hits a minute, but those times when we have 3 to 5 page requests per second for 30 seconds or more, it's tough to keep up on shared disks. It's just not worth it to us to play the oversold VPS game...
(Admittedly, going back to dedicated is possibly a kneejerk reaction, but it did leave a bad taste in my, and all of our users mouths...)
