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Both sides of the argument are right to a degree. Absolutely much of what you say is 100% true, but the statement "you get what you pay for" isn't always all about price. For example, if one's focus is instead on reputation and the company that many of the top industry clients are hosting with and have been with for years and years, then that extra cost might become less important or altogether immaterial, and in that sense one really would "get what they pay for" as opposed to always going with the cheapest.
In the end it's of course all about finding a host that makes you happy, period.
For me the cost of hosting, whether I'm paying more or less than others, is a business write-off so I really don't put the emphasis on price but on service and reliability. I want less worries, not more. Any host worth their salt should know that and deliver on it 100%.
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