Fully managed servers are really expensive and often inflexible, while with VPS you are all on your own, which not every developer wants (or feels confident in). I was just discussing a week ago how there is a big market in doing this management.
And then sometimes software might need to be restarted which means you have to tell them to restart it themselves or get them to explain enough about how it works so you can restart it.
So unless you are going to charge hourly and staff accordingly, it seems like a no-go.
In this case, $100 per month is really going to pay for maybe two or three hours of sysadmin or application development work max. I.E. helping with various issues that come up in ordinary dev ops or software configuration that are specific to that particular customer's setup. And you just have to count on the idea that most people won't take advantage of more than that average amount of help, like only when they are panicked. And then hope that it is something that you can actually fix in a short amount of time.
If the remote hands are awesome, this is well worth $100 per node. If they are anything but awesome, this wouldn't be worth it for any amount of money.
Their documentation in the Linode Library is also really great -- as a starting point. Assuming that they're using the same guides in recommending server configuration, there are some things that could be done better by a skilled admin. e.g., their LAMP server guide for Debian 6 doesn't include suexec or any variation of FastCGI, two must-haves for a public-facing web server IMO.
Of course, they could have handled security internally better but I suspect other VPS providers appear more secure only because nobody has gone out of their way to target them.
The takeaway is that now, while I don't know if I can trust other VPS providers or not, I know I can't trust Linode. (Hell, to some extent, I trust HTP more than Linode now -- I haven't seen a dump of the Linode data on pastebin or a .ru forum yet.)
How a business handles disclosure of a compromise is as important to me as the fact that they were compromised. Notably, this is the second time they screwed up disclosure, after being raked over the coals for it the first time. I was willing to let the first one slide since Linode is so awesome in every other regard, and hope that they would handle the next incident more gracefully. Unfortunately, they didn't.
FWIW I'll be finding a new host, I just like to play devils advocate to balance discussions.
People need to stop excusing this sort of behaviour from companies.