I’m sure at this point everyone has seen hosting offers for 500+ GB of storage and 5+ TB of bandwidth, or even unlimited resources, for $5-10 per month. If you look into dedicated server pricing, to get 500GB of storage and 5TB bandwidth with full management you’re likely looking at spending at least $600. So how can a host offer those same resources for 1% of the price? The answer is they can’t.
If you look into the terms of any of these hosts you will normally find terms like: all files must be linked from a page on your site; 99% (or more) of your files must be .html, .php, etc; you are limited in the number of files that you can use by inodes (combined with the file-type limiting this makes it impossible to use your diskspace); the maximum file size for any single file is 5-10MB; very strict CPU usage allowance; and the list of these types of limitations go on. If you figure the average single page on a site is around 150KB, you would need around 33 million page views to use your bandwidth allotment. That would likely make sure site one of the top visited sites in the world.
To get the number of accounts on each server to make managing all the terms of service violations worth-while these hosts generally need to pack each server so full of accounts that during peak times the servers slow to a crawl. Even if the CPUs and RAM can keep up, the hard drives and NICs struggle.
When a host doesn’t oversell their services they don’t need to have all of these restrictions on how you use your space as they actually have the space available on their servers. Since they aren’t engaging in oveselling, their prices will need to be slightly higher, or their packages more reasonable.
The choice is always yours, but remember that in hosting, as in life, you often get what you pay for.