Also it assumes that only one program is running on a machine and it's ok to use all the machine's resources. In practice that isn't true - if your web application uses twice as much server memory then you're going to be paying nearly twice as much for your cluster of servers. That makes a big difference.
"The most amazing achievement of the computer software industry is its continuing cancellation of the steady and staggering gains made by the computer hardware industry."
(Henry Petroski)
Right! Had we not squandered all those wonderful hardware performance gains on useless stuff like web browsers, searching the entire internet in milliseconds or streaming HD video over the net, we could now play Pac-Man thousands of times faster than in 1983!!!
