Yes, same thing in the system we built and maintained. But believe it or not, even an upgrade from PHP 5.x.y to 5.x.y+1 can cause existing software to break. With a million customers, some of them will hit even the most obscure bugs.
The actual problem is more complex: you always have the conflict between wanting users to use the latest version (because of security issues or stuff like that) and not breaking the software they're running.
Anyway, i fully agree: providing hosting is a hard business. Imaging what 1and1 needs to do for this huge server farm... wow. It's ok for a lot of low traffic sites without much functionality, but in my case I needed more at one point. Now I have the choice between 5.3 and 5.4. Thats neat.