Agree, but also depends on the location. But seems even the cheapest places to live in the world comes close to $500 a month for living costs.
$1000-$5000 would have been nicer, then people in those locations would have at least a chance at a 10 month runway for the highest grant amount.
I don't think the author is expecting people to finish any of the funded projects, just to kickstart them or even give some inspiration.
I live in outskirts of a second-tier city in southern India. Spacious rented room and I employ a maid for washing needs. My average monthly cost is $150.
Somebody who can develop a self-hosting programming language that is useful for anything can probably earn at least $5000 regardless of where they live. I wouldn't expect them to live on 1/10th of that even if this is technically possible.
I know quite some highly brillant people who have difficulties getting a decent job perhaps because they are really bad at self-promotion.
So being able to earn such an amount of money depends on having some further traits that don't have anything to do with intelligence or programming skills (rather perhaps a little bit with hustling skills).