According to their website (http://success.heroku.com/) some pretty large websites run there, including Urban Dictionary and Rapportive.
Sure, it may cost more, but not more than a full time sysadmin and you are buying efficiency and flexibility. You can buy a lot at heroku for $10,000/month (the minimal cost of a full time deployment / sysadmin / dbadmin,) including I'd imagine some rather hands-on support.
This article seems to downplay the great advances that have been made in "cloud" deployment. IMO, a cloud service like heroku beats the pants off of self-operated virtual servers and debatably some of the higher "stages."