So let's see... you're hosting a website that has gotten large; that is, it's grown to the point that it will need higher-cost services in order to meet demand. You have a chance to add a valuable customer to your client base. How best to handle this?
Yeah, Pair screwed themselves pretty badly by pulling this trick. They would have been far better off doing something like:
Dear [account_contact_user]
Your website traffic has risen beyond the maximum threshold of [threshold_amt] for the [name_of_level] level of service.
Since we appreciate your business of the last [length_of_service], we have given you a 24 hour courtesy upgrade to our next level of service -- [name_of_next_level]. If, by [end_time] you decide to keep this level of service you must contact our sales center to arrange payment. Otherwise we will have to start throttling traffic to your server so that it remains below the threshold of [threshold_amt] and does not impact our other customers.
If you have any questions about this courtesy upgrade, or wish to keep this new level of service, please contact [account_manager] at [account_manager_details].
Thank you for using Pair Networks for your hosting needs.
Of course, the flip side is that leaving it running adopts an attitude of "screw all our other customers, they can eat crappy service while we kiss up to the popular guys who are chewing up everybody else's server resources". Which isn't what I'd look for in a hosting provider...
False dichotomy. The correct way to handle this would have been to temporarily move the shared server to hardware where it won't impact other customers and notify YC that they need to move their server to a bigger server or the site will have to be shut down. Presumably with an ultimatum of a week or whatever.
a) anything
b) except
c) killing their service