Well, there are a few considerations here (all of this is in reference to Softlayer, whom we use):
- Depending on your storage requirements, 2 drives + RAID 1 (which is more of a convenience than anything and I almost never recommend getting) is often times more expensive than an iSCSI LUN which is far superior and offers zero-setup cross-country replication and snapshots (if we're going to pretend that RAID 1 is some kind of backup solution).
- When ordering, if you choose the lowest clock speed CPUs, you're practically guaranteed to get the highest rated (more expensive ones) for free. This is either due to scarcity of low-end CPUs or Softlayer loves me. I have ordered numerous boxes from them and this has always been the case.
- They always have "specials" which are usually pretty ridiculous. For instance, 16 of the 32GB of RAM we have was free, as in beer. Right now (and most of the time) they have free double RAM and HDD. Kiss the cost of one of those RAID drives away.
- There are non-monetary considerations, such as support. Softlayer has without a doubt the best technical support I have ever been provided, and I've been through countless hosts in my tenure. We're talking about an Unmanaged host that has better techs than any Managed host I've come across. Not to mention conveniences such as automated OS reloads, private network, inter-DC OC3 backbones, VPN, secure backups, optional CDN, etc. (AWS has most of these afaik, minus VPN, but this goes to equivalence)
- Your 4-core server, if you don't make use of deals, would likely be equivalent to AWS. Once you start getting into high core-counts, that changes fast. As a huge proponent of parallelization, many of the processes run for TicketStumbler make use of multiple CPUs; this means a lot of what we do is CPU-bound, thus the need for higher core counts.
- 2TB of bandwidth is included; I also have no idea how this affects the cost overall. Edit: I added a couple TB of transfer to the AWS calculator, plus 80GB of storage: $854.10 per Extra Large. The difference in cost between this and our machine now amounts to nearly nothing.
So, at the end of the day, the hardware we have is nearly identical in cost (within $100, IIRC) to the Extra Large Linux instance you reported, while having twice the number of CPU cores and twice the amount of RAM. We're also afforded all the other luxuries that come with the myriad services and support the conventional dedicated host provides.
The dedicated hosting environment also allows me to setup and administer the hardware in the method I described in my previous reply; i.e., I don't have to setup a single Extra Large Instance (well, technically two) to handle a dozen different jobs.
Hope this helps! Let me know if you have any other questions.