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You're wrong about that. The big hosting providers do not put public cloud hardware next to dedicated hardware. Public cloud hardware goes in big, homogenous racks in a specific area of the datacenter. Dedicated hardware is very mix-and-match; you have all sorts of servers and network devices racked together. Connecting the two environments is no small feat, given the VLAN limitations of most current switches.

Who said it was amazing? And I highly doubt that virtual and dedicated are the same boxes sitting next to each other (or even near each other).

Of course its not amazing, but it is a feature they have that would have made the transition to dedicated easier.

Being networked is a feature?

Being in the same datacenter is a feature since it means there is extremely low latency between your dedicated and cloud machines. Sub-millisecond vs. 10s of milliseconds round trip times can make a huge difference.