Not really. How did it change the game for service providers over at LowEndBox.com, who have been providing VPS servers for $5 or less, before DigitalOcean even existed?
Stored backups (for free) of servers that you can set up at a later date instantly via an api
It's not about being a $5 vps for me, it's about being able to pay $0.014 when I need a small vps for 2 hours.
Our service is mostly CPU bound, embarrassingly parallel, and so far, 90% of usage is centered on a time slot that's about 8 hours per week long.
We will save a ton of money by scaling down during the off hours, which means only Amazon, Rackspace, and a few others make any sense at all.
I lurked for less than a day on Lowendtalk and got an idea of the most respected/high quality hosts such as:
BuyVM ChicagoVPS Prometeus (and IperWeb) HTTPZoom Iniz Ramnode
I've had a box with most of these (apart from Ramnode which is highly regarded) and i can say i've had an awesome experience.
I think "sketchy" is a good characterization when a pick of the "best" hosts have severe problems.
If Apple got hacked because their dev center was powered by a $10 control panel script then yeah... they'd be extremely sketchy too.
As someone who have used quite a few servers from LEB over the years, there is no way I am going to put anything serious in most of their offering. There are some exceptions, like Ramnode, BuyVM, but DO pretty much made the choice easy for me. Why bother taking a risk?
1) Cheap price and good offering and service.
2) Now I know they are going to stick around for a while.
Remember Slicehost? They might stick around but not in the form that you like especially given that DO are playing the startup game rather than growing organically, building a solid business, and then taking money at a later stage for targeted expansion, like Atlassian and Github.