(This is Jason, founder of WP Engine)

Great points all around!

One argument is that "70 requests/hour" is incorrect -- you're assuming even traffic distribution which is not the case.

Also, the fact is we're not nazi's about the limits. If you burst for one month due to big press, that's OK. If it becomes a pattern, then it's time to move up, but it sounds like you'd agree that moving up the tiers for a site that gets e.g. 200,000 pv/mo is also pretty reasonable for all the stuff we provide.

Also we know first-hand that a $200/mo VPS machine does not have "a thousand times the capacity of the $199/mo account." We have customers who actually do have a thousand times that traffic, and they will attest that that's just not true.

As for folks like Penina who spend $14.95/mo with lots of sites with lots of traffic and never had a problem -- that's fine! It's absolutely true that not everyone ought to pay $49/mo or $199/mo for WordPress hosting.

But for every one of our customers (which as you point out is quite a bit), they used to have $14.95/mo hosting or in some cases thousands/month, and all found it lacking for themselves, and found that we're a better choice.

I think it's great that there's tons of choices for WordPress hosting, and I hope people simply consider WP Engine as a good choice for a CERTAIN type of site and site-owner, and use our competitors when they are in fact the better choice.

I would think Automattic -- and Matt in particular -- would agree!