This definitely contains a valid perspective for green web developers, but it's thin on actionable information. All these platforms have real upsides and downsides that should affect your decision more than raw cost. Heroku for instance is very stable because of the controlled environment, but they nickel and dime you for any services that are not part of the standard package. EC2 is easy to scale with, but IO throughput is bad, especially on smaller instances. EY gives you root access in conjunction with a mature suite of Chef recipes and some higher level services, but they charge a premium and some of their choices might not be technically ideal for you.
The bottom line is that dedicated hardware is cheaper because it comes with less. If you aren't making use of those value added services, then by all means go dedicated. If you know you don't know what you don't know and you want experienced support to take responsibility for a larger percentage of the stack, go Heroku or Engine Yard. If you have specific overriding requirements, let that guide your decision to a platform. There's no one size fits all solution, and cost is not the primary difference.
One advantage of "Heroku's" nickel and diming is that the money is actually being split with other companies in most cases, and those companies core competency is providing exactly that service, whether that be a Redis server or email delivery.
You do pay more than just throwing another service on a machine you're already running, but you've got a fairly good chance of it being massively optimised.
The bottom line is that dedicated hardware is cheaper because it comes with less. If you aren't making use of those value added services, then by all means go dedicated. If you know you don't know what you don't know and you want experienced support to take responsibility for a larger percentage of the stack, go Heroku or Engine Yard. If you have specific overriding requirements, let that guide your decision to a platform. There's no one size fits all solution, and cost is not the primary difference.