It depends on your speed, concurrent user capacity, and uptime requirements (among other things). I run two production servers off two separate $5/mo VPSs, one getting a few thousand hits a day. No issues whatsoever.
How frequently is that database backed up? How many hours of work are users going to lose? And you're going to wake up at 3:00am and take 2 hours to get a new server online?
This is all fine for a service with a few thousand users that's not mission critical. But I assume the article is about building apps to be a real business not just a hobby.
I run a few hobby sites under the same scenario as you but all my work sites have multiple servers to fail over to and replicated databases.
That all sounds very reasonable. Ours is a news website which publishes semi-frequently; so we'd probably lose about 5-10 articles on average. It's not just a hobby - it brings in more than a minimum job's worth per month at the moment and is growing fairly quickly, since we operate in a growing niche.
Like I said - it's all about your requirements, and for us $5/mo is just fine.
