Interesting to see this. It sounds like they're not on AWS, given that they mentioned that having 1000 instances for their production environment made them one of the bigger deployments on their hosting provider.
If not for the troubles they experienced with their hosting provider and managing deployments / cutting over traffic, it possibly could have been the cheaper option to just keep horizontally scaling vs putting in the time to investigate these issues. I'd also love to see some actual latency graphs, what's the P90 like at 25% CPU usage with a simple Gunicorn / gevent setup?