None of this is true. VPSes have existed since the early 2000s and have been in common use since the mid 2000s; Linode was founded in 2003, for instance. Shared hosting was popular because it cost pennies, whereas VPSes would run you $30+/mo, which of course is more like $5+/mo now.
Linode's kind of expensive. I've been using VPSDime [1] for a few years, since they give us 6 GB of RAM for $7 a month. For smaller stuff, I've been happy with RamNode [2], which is $3.50 a month for 1 GB of RAM. And you can usually find good deals on Low End Box [3]. Of course, at those price points, everything is OpenVZ, which is kind of annoying.
