In the limit, there are some startups that could run production on a single Linux host - I recently helped one get off Heroku and their spend went from ~$1k/mo to ~$50/mo and it made debugging and figuring out performance issues so much easier than what they were doing previously...
I'm very much with you on this, but I do understand that it's one of those things that is just not feasible when your team has no sysadmin/devops experience. You were able to do it, but what happens to them when you're not around? Does their team have the required experience to handle it? That's the difference in cost. It's like DYI - yes, if I have all the skills and experience I can do everything myself incredibly…
Exactly - $950/mo is nowhere near enough to pay for those skills if you don't have them. It's good value for money.