Reading the comments here really is funny. If you do not like their ToS, you are free to go somewhere else. Your money, your vote.
Personally i find their policy very understandable. Obviously you won't be able to host a TOR node on this thing or push tons of traffic over it. That's obviously not what it was made for. This $1 deal is perfect for hosting simple, static sites or just playing around with the OS. But some people will complain about anything.
The only way to go below $1/mo is by using over-subscription. You don't get dedicated hardware for $1/mo.
With over-subscription, it's a mathematical fact that you cannot use all the processing power you've seemingly been given. The VPS provider could just give you only as much CPU power as you can use at any time (effectively 1/n the total power with n users) -- but that would be terribly inefficient (most of the CPU power would be unused at any given time).
This isn't for everyone, of course, but I don't see a reason to criticize this business model when it delivers a definite advantage: lower prices.
If you don't like the trade-off of a lower price at the cost of not being able to use as much CPU power or RAM as you like, you may choose a service with less or no over-subscription. But I don't see how that subtracts from what this service has to offer.
I feel like none of the people commenting on the ToS did buy the services. They were warning people who might not have read them that you're not necessarily getting what you'd expect. It's a perfectly reasonable comment to make.
Personally i find their policy very understandable. Obviously you won't be able to host a TOR node on this thing or push tons of traffic over it. That's obviously not what it was made for. This $1 deal is perfect for hosting simple, static sites or just playing around with the OS. But some people will complain about anything.