My startup has grown and is profitable, and I would never pay that. We pay about the same amount for a 16 core beast from Softlayer as you get there for one slice, which is weaker than a $300 Dell I bought two years ago.
What makes you go that route over any normal hosting solution?
For the specific Rails app we run at EngineYard, the fully-managed aspect is very attractive. I've got multiple apps and even multiple business ventures–so I can't be hands-on at the server level for everything.
Their staff is very pro-active and always available. I could go on, but my point was simply that EngineYard isn't just for vc-backed companies who need to burn some cash.
And, for the record, I also am a Slicehost and Joyent customer.
Just a bit second thumbs up for Softlayer here. Used them for a few years and they've been persistently excellent. I also use Linode too now though for smaller stuff.