And this kind of growth almost always means founders are looking for an early exit. Yes it's all a happy ending for the founders but what will happen to the end users?
Hardware prices don't drop so much at this scale unless you're buying in extremely large quantities. Even then and they don't drop as much as bandwidth (except for out of lease equipment and I doubt DO does this).
VPS in general is insanely profitable, if you know what you are doing.
The employee aspect will always be there, DO can still make money by not taking outrageous profit margin like AWS and Rackspace.
You don't really charge a client for the bandwidth costs incurred during a DDoS if you choose to absorb the attack. You don't charge a client when a RAID controller fails and you need to restore xTBs of data (xx man hours). Oh and you need to purchase backup nodes, which you're not getting any immediate return on.
You need an office. You need to factor in travel costs. Overtime pay. Health insurance, payroll costs, etc. Ads...
You can buy a 1U server that could fit 100 DO sized droplets for about $5,000. Scale that up a little bit, and you can see that it might be profitable although low margin.
Equally, at our company, we're paying DO for many different machines at $160. I'd love to know their ARPU number, I expect it is actually significantly above $5.