From all of the posts I've seen here, I think that both of the articles are right:
1. New hosting customers or customers who do not use their account much do not care about the price. They assume that hd space = hd space and bandwidth = bandwidth.
2. Businesses and others who have experienced the dread of downtime understand that a higher price is generally equivalent to better service.
Of course, differentiating yourself from others solely by price is not the best way to market. The #2 crowd probably also knows that they can still receive that crappy $2/mo service with a $10 host, so you want to establish yourself as a provider of a great service in general -- any combination of uptime, support, usability, etc.