The idea that you should price things based on what they cost you to acquire is the reason engineers are rarely trusted with pricing in established companies. Slicehost can charge whatever it wants for storage, because you can't get storage with a Slicehost wrapper around it anywhere else. This is just an optimization problem.

Something to like about this situation: most startups price too low out of the gate, and should be raising prices regularly. Here Slicehost gets a (small) shadow price increase over time, as its costs for storage and compute decrease.