yeah, online hosting market.. is very cut throat. There are hundreds, probably thousads of them who offer the whole 10GB for a $1 deal. These guys will not make it, but there are so many of them, and the majority of ppl don't seem to learn that you can't get decent hosting for that much.. and just keep jumping. That's what I seem to see.
But yeah, if you shoot for the local market, you might be able to make some money, and then grow from there. Just don't get into a lowest bidder pricing war, it'll drive you out.
Hell, even the local market can be tough. I'm still looking for a way to advertise and get my name out (that and I need to redo my site 🙂). It doesn't help that I live in a pretty "high tech" area.. DC... sooo... we'll see how it goes.