Those were in a private datacenter.
Yes hosting can be more expensive if you already have a datacenter. If you don’t have a datacenter then its usually cheaper.
With the cloud based servers it can be much cheaper. I have go out and have a server built with OS in under 5 minutes. For a low end server running a web app and database it costs me about $25 bucks a month.
Great price. Now with the project NASA and Rackspace are working on to create open source for the cloud, you will be able to create your own interface into the cloud and configure whatever you want. Will be even cheaper in the future.