Hetzner's pricing is a reflection of the generally lower price level in Europe. Dedicated server providers with US datacenters do exist, but their pricing is much closer to Amazon's.
Why are they so expensive? German electricity is ~2x as expensive as the cheaper US regions.
A lot of the cheap Hetzner boxes are using consumer hardware. The EX line starting at 40€/month are using 6th generation i7 CPUs. The AX line is using 3rd gen Ryzen CPUs.
If you want actual server-grade hardware, you'll end up with around 90€/month, other hosters are more expensive. I'd assume this would explain some of the price difference
Maybe. But honestly AMD server HW is <50% more expensive than their non-server hardware. Also their consumer chips do offer ECC support, and you don't need anything else really for those applications.
They use consumer hardware, that's why they are so cheap.