As someone who has used both Linode and "low end box" services, both have their place. Two observations:
1) I feel like Linode offers a level of support that the others don't offer. There are lower end providers that do offer good support, but it's not as consistently good as Linode. Were they to start offering cheaper $5 or $10 a month plans, they would be challenged when it comes to continuing to offer that level of support.
2) Observationally, it seems to me that Linode customers on average tend to be more serious about their usage than those who are looking for a <$5/month VPS. Go to the IRC channels for each company and see who hangs out there. That said, this should only matter to you if you are concerned about who your neighbours may be on a VM host, if you plan on being part of the IRC community, or if you are concerned about how reputable your IP address looks given what block it belongs to.
I agree with this. I have a few DO accounts, a Linode and a few BuyVM accounts. The Linode is what I use for all of my "serious" production stuff, but I love the LEBs to play.
That said, I do think the performance of DO is quite good. It reminds me of Slicehost back in the day.
The BuyVM guys are just the best people ever, and I mostly maintain play boxes there just b/c I can get away with stuff there that might not fly at DO or Linode.
There's also the aspect of customer expectations. At Linode's price point I feel like no matter the size of my VPS, I am allowed to have the expectation of a certain level of support. If they were to take too long to address a ticket or fix an issue I would be more inclined to make a stink about it versus a provider that is providing me with a VPS for what turns out to be $3.00 a month!
1) I feel like Linode offers a level of support that the others don't offer. There are lower end providers that do offer good support, but it's not as consistently good as Linode. Were they to start offering cheaper $5 or $10 a month plans, they would be challenged when it comes to continuing to offer that level of support.
2) Observationally, it seems to me that Linode customers on average tend to be more serious about their usage than those who are looking for a <$5/month VPS. Go to the IRC channels for each company and see who hangs out there. That said, this should only matter to you if you are concerned about who your neighbours may be on a VM host, if you plan on being part of the IRC community, or if you are concerned about how reputable your IP address looks given what block it belongs to.