The problem to me isn't ability to scale on one server, it's the single point of failure. My biggest site is a wordpress box with one instance on a pretty big VPS. In the last year I've had several outages big enough to require a post-mortem (not complete outages, but periods with high levels of error rates/failures), and every time it has been because of internal data center networking issues at my preferred cloud provider (and thankfully their customer service is amazing and they will tell me honestly what the problem was instead of leaving me to wonder and guess). So the main incentive for me to achieve horizontal scalability in that app is not scaling, it's high availability so I can survive temporary outages because of hardware or networking, and other stuff outside of my control.