I'm not trying to dissuade you from using prgmr, but EC2's reserved instance pricing makes it a lot more competitive. You can get the 3.75GB medium instance for $55/mo (1-year commitment including the up-front fee as a monthly cost) which compares nicely against prgmr's $68/mo 4GB instance ($14.67/GB vs $17/GB).
In fact, I'm wondering how you came about your "I'm able to run infrastructure comprising ~500GB RAM for literally 3% of the cost of EC2" calculation at all. Even without reserved instances, Amazon has their 3.75GB instance available for $115/mo (or $30.67/GB). At $17/GB, prgmr is more than half the price (~55%). That is a savings, but certainly nowhere near 3% of the cost.
IIRC, prgmr charges $4 plus $1 per 64MB of RAM. Assuming that they'd sell you a 500GB instance, that would be $8,004/mo. Since you'd probably have to spread it over more machines, it would likely be a bit higher. Anyway, even without dipping into reserve pricing (using the quad XL high-mem instances), you can get 500GB of RAM for $9,000-$10,000. Again, prgmr is a bit of a savings, but in the 10-20% range.
And here's the big point. If you're using AWS for on-demand instances in that range, you're likely to want the hourly billing and rely on the fact that Amazon has much greater scale. Prgmr can have a queue for more capacity so clearly they're not accommodating someone like Netflix who needs 1,000+ boxes to do encoding for a week when a new platform comes out and then shuts them down until a new platform comes out. If you're running a more predictable infrastructure (which it has to be to an extent to go with a smaller player), then you can use Amazon's reserved instances. Amazon's reserved instances beat prgmr on price.
Now, I didn't calculate in storage or bandwidth into Amazon's costs, but even with those additional charges, I don't see how you came upon prgmr being 3% of the cost of EC2.
For my own personal server, I have an EC2 Micro instance with 1-year heavy utilization. That means that I pay $8.77/mo for 613MB RAM - a discount against prgmr's $12. Now, I have to add storage to that - the 12GB that prgmr offers would cost an additional $1.20 - and bandwidth, but I don't break $12 for my usage. If I wanted to commit to three years, the cost would be even less - $6.38/mo.
None of this is to take anything away from Luke - he's literally written "The Book of Xen". That said, Amazon's pricing isn't much more expensive. Their reserved instances can be a good bit cheaper. Amazon also has the scale to accommodate you more easily. Prgmr can't keep thousands of spare boxes on hand and they (as you noted) have had queues for instances. Amazon is by no means the be-all and end-all of Xen instances, but it's pricing isn't that bad (and in fact can be better) and there are advantages to using a company with Amazon's scale.
In fact, I'm wondering how you came about your "I'm able to run infrastructure comprising ~500GB RAM for literally 3% of the cost of EC2" calculation at all. Even without reserved instances, Amazon has their 3.75GB instance available for $115/mo (or $30.67/GB). At $17/GB, prgmr is more than half the price (~55%). That is a savings, but certainly nowhere near 3% of the cost.
IIRC, prgmr charges $4 plus $1 per 64MB of RAM. Assuming that they'd sell you a 500GB instance, that would be $8,004/mo. Since you'd probably have to spread it over more machines, it would likely be a bit higher. Anyway, even without dipping into reserve pricing (using the quad XL high-mem instances), you can get 500GB of RAM for $9,000-$10,000. Again, prgmr is a bit of a savings, but in the 10-20% range.
And here's the big point. If you're using AWS for on-demand instances in that range, you're likely to want the hourly billing and rely on the fact that Amazon has much greater scale. Prgmr can have a queue for more capacity so clearly they're not accommodating someone like Netflix who needs 1,000+ boxes to do encoding for a week when a new platform comes out and then shuts them down until a new platform comes out. If you're running a more predictable infrastructure (which it has to be to an extent to go with a smaller player), then you can use Amazon's reserved instances. Amazon's reserved instances beat prgmr on price.
Now, I didn't calculate in storage or bandwidth into Amazon's costs, but even with those additional charges, I don't see how you came upon prgmr being 3% of the cost of EC2.
For my own personal server, I have an EC2 Micro instance with 1-year heavy utilization. That means that I pay $8.77/mo for 613MB RAM - a discount against prgmr's $12. Now, I have to add storage to that - the 12GB that prgmr offers would cost an additional $1.20 - and bandwidth, but I don't break $12 for my usage. If I wanted to commit to three years, the cost would be even less - $6.38/mo.
None of this is to take anything away from Luke - he's literally written "The Book of Xen". That said, Amazon's pricing isn't much more expensive. Their reserved instances can be a good bit cheaper. Amazon also has the scale to accommodate you more easily. Prgmr can't keep thousands of spare boxes on hand and they (as you noted) have had queues for instances. Amazon is by no means the be-all and end-all of Xen instances, but it's pricing isn't that bad (and in fact can be better) and there are advantages to using a company with Amazon's scale.