Getting a vps for $8-$20/mo from linode, slicehost, prgmr, webbynode, rackspace cloud or any other vps provider is so much easier than dealing with a machine at your home.
And at the $8 end of the scale a VPS costs less than the electricity to run a normal x86 machine.
I have a couple of low end VPS machines with different providers. The liabilities include:
1) If it goes down, and you need it up NOW… there is nothing you can do.
2) It may become inexplicably slow as they move pigs onto your box.
3) Given your low rent neighborhood you may find yourself banned because of your IP range. (I live in hope that someday Comcast will lift their wholly unjustified ban on my email server and my daughter will be able to send email to her great aunt.)
4) Expect more outages than a simple PC. Sure they use "server grade"[1] hardware, but they also have insanely complicated setups. I generally reboot my physical servers when uptime goes past one year, just in case. That is not going to be an issue with the VPS machines.
5) Many packages have a predatory bandwidth overage charge. I've never triggered one, but it is a cause for concern.
6) Storage can be very expensive.
On the happy plus side:
1) When the server goes down, there is nothing you can do. Go have lunch. This beats the heck out of frantically diagnosing and fixing while the phone rings off the hook with people who want to tell you the server is down.
2) You automatically have two sites. Your house becomes "offsite backup".
3) Your VPS probably has much higher bandwidth than your house. (Except you lucky Koreans, and Finns, and Japanese, and.. well a lot of you people with real bandwidth to homes.)
[1] "server grade" means a 100% chance of a high price, and an X% (where X < 100) that it will be reasonable quality. I've purchased and installed batches of "server grade" machines from top manufacturers that had MTBFs under 12 months. By the time you know a model well enough to trust it, the vendor no longer sells it.
Still, at $20/month I use a small $100 plug computer (such as http://en.wikipedia.org/wiki/SheevaPlug) as a home server instead. Your use case may be different to mine but that is more than I'm willing to pay within a student budget.
Oh, I'm not in any way suggesting that this is what the article is talking about. I'm specifically curious about how cheap shared hosting delivers (or fails to deliver) in a price / performance comparison to one of those "plug on the wall" servers. Not trying to be snarky here; I'm actually hoping for a legitimate response, as I have no experience with them (but they sound kind of interesting).
I don't think those are private servers, and they are fairly poor on the storage/$ scale. But $25/year is a lower entry point then most, and if it is enough then good.
