I've had the opposite experience of WP Engine, and appreciate leaving caching and performance issues to somebody else, given that my company has a somewhat limited staff for supporting servers and CMS upgrades. I am building a semi-complex Multisite installation with multiple domains. So far, it's been pretty decent.
Your frustration with their caching "secret sauce" is understandable. However, you can get a rough idea of their caching back-end by poking around in the WP Engine config files and plugins bundled with your installation. They also provide a nice little overview here: http://wpengine.com/our-infrastructure/.
If you are staging out anything more complex than a single blog, you will definitely want to have two production instances to test on. For some, this is a raw deal. I personally don't mind.
I am also not a huge fan of their CDN feature, which works by rewriting URLs in your page source to point files and assets to NetDNA servers. However, I am hopeful that they will improve upon it.
That said, I have enjoyed a platform that keeps my Wordpress installations secure with automatic upgrades.
Comparing WPEngine to other hosting providers like Linode or Dreamhost is really unfair. They offer completely different services, and specialize in Wordpress-optimized hosting only.
I also have to say that it was really nice to not be part of Amazon/Heroku's outage this week. WP Engine has a control panel hosted on Heroku, but all their sites live in the Linode network, evading downtime.
Page.ly was awful. When my sites weren't down due to botched infrastructure upgrades, users would get locked out of the admin interface by "FireHost Website Protection" (FireHost was/is their underlying hosting provider). The same sad cycle repeated multiple times:
1. Email FireHost with the event IDs and a request to unblock.
2. FireHost doesn't reply for 24 hours, or if they do it's with "we can't find that event in our logs".
3. I open a Page.ly ticket
4. "El Vaquero Furioso" (yes, that was his name in Zendesk) replies that the issue is fixed and won't happen again.
5. I ask for the root cause and what steps were taken.
6. Crickets, or a snide response from the founder that "we're all on the same team".
Sorry we handled that poorly. At the time Firehost was having some significant issues with their firewall policies. We do constantly walk that line between enforcing security at the edge and annoying customers that may run into WAF blocks. It's a delicate balance.
The problems you had have since been resolved and pagely is running under a new firewall (and new blades) which are much more reliable.
In addressing your frustration my comment of 'we're on the same team' was to demonstrate that we were all working towards a solution for you. As professionals dealing with other professionals we aim to acknowledge and address the problem while steering the conversation to a positive outcome. If our customer views us as an adversary it makes the process more challenging for all involved. By re-framing the conversation as we are all in this together, all working towards a solution, we feel it is more likely the positive solution will be found and implemented sooner. My comment was a gentle reminder to that effect: acknowledging the issue, and we are working with you, and with our partners to remedy it.
Thank you for your past business, and we hope one day to earn it again.
- joshua strebel, founder pagely.
Basically all services have a group of satisfied users and a group of unsatisfied users.
What blows a story like this up (as much as hitting the front-page of HN is 'blowing up') isn't that a service failed to meet the needs of one blogger, but rather that the people running the service respond to criticism (in public) sounding more like petulant children than professionals.
As someone not into blogging, I'm not that familiar with WPEngine, but based on comments here that link to various twitter comments now I suddenly have a negative-leaning opinion of them. Primarily because they couldn't take a negative review without calling the poster a "hater". (FWIW, a lot of my negative opinion is tied up in this stupid word, which IME comes out as a last resort when the person using it knows there's a lot of truth to what the other person is saying but they refuse to acknowledge it for whatever emotional reasons).
I had the opposite experience as well -- I tried Page.ly first but could not import any of my sites (which all use a variety of custom post types). Their import process seemed more attuned to vanilla installs. Closing out my billing with them was also somewhat arduous.
WPE has been great so far -- very responsive support -- and their caching handles about 8 million pageviews a month with 600-800 simultaneous visitors and very little downtime.