Don't forget you also have to pay something like $0.10 for 1GB of outgoing traffic.
Budget VPSs are the modern "shell account", their primary users are a combination of learners, early-stage developers, small-scale control-freaks, people who don't know any better, and of course the odd criminal enterprise.
Some of these will never grow much, the ones that do should normally have the cash for better accommodations and/or more EC2 bandwidth, and the criminals I don't really care about.