I agree that due to the nature of VPS, the price should be much lower even with the same level of support and management. We monitor all containers *all the time* to keep our master nodes fast and stable. Xen VPS (which we also have) is usually more expensive because the hardware resources are completely isolated and dedicated and therefore cannot be oversold like the more common OpenVZ or KVM. In other words, you can never overcommit CPU and RAM on a Xen VPS.
Here's a nice article on the differences between the two VPS virtualization platforms we offer:
https://secure.xenlayer.com/index.ph...openvz-and-xen
Edit:
One of the advantages of a VPS is that up- and downgrades can be performed on the fly. And you can reload whatever OS you like whenever you want from your VPS control panel, but hostgator does NOT offer this and they do not use Xen - for your information..