Hetzner prices are great for any software engineer. Having that powerful server waiting for my projects is one of the reasons that I had the chance of succeeding. I used to say that this is our profession and having a dedicated server is a mandatory thing.
Even with one server from hetzner I was able to virtualize it into 8 machines and create a real production environment that made it easier to scale. After you learn XEN it's faster than going through amazon interface.
From my past experience I always worked with people who wanted to use amazon or google appengine. I was always against it and said that the prices were ridiculously expensive. My colleges said that they didn't wanted to manage servers and the cost of appengine was only $2 per day, etc. This is a real story and when the time of high traffic came the $2 became $50 and now we pay $1500 in something that could be handled with ONE $100 hetzner server. After using hetzner I would NEVER advise appengine and I would only advise amazon if you must have the servers in the US.
For those who say that the site would have too much latency if it's in hetzner: just use a cdn for static content, http://www.maxcdn.com is very cheap and probably much better than just hosting in the US.