If everyone is being hit by the same cost issues, small VPS hosts just need to charge more to operate the same. Most small VPS hosts are dirt cheap and I don't think many people would be shocked if prices go up in this environment.
Some dirt-cheap VPS maybe too unreliable to run anything serious, that's why they sell that for dirt cheap. And their consumers generally won't complain about sudden server reboots, because that's what expected for the price.
If they increase their prices, then many of their customers maybe better off just use Linode or DigitalOcean etc instead, as these vendors provides better guaranty on stability.
Not sure what the lift might be, but in theory everything should be relatively similar in future state, just more expensive. This is basically a form of inflation.
People renting VPS to do something, running a service, a website, email etc. But there are other ways to achieve the same without the need of a VPS.
If VPS cost increase to a certain level, some people will just host the service on their own Raspberry Pis through Cloudflare Tunnel, or just simply shut the service down.
The comparison to 2000s telcom market does not seem similar at all to me.
The provider is still making the same money for the same cost on that pre–existing service, so they might not even choose to raise the price for old customers. They're only losing an opportunity cost, and different businesses weight that differently.
I used to run a small shared hosting business in early 2000s and I’d never raise prices on low consumption users, was never worth the risk of them canceling their subscription