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Why so many?
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Bad analogy time. There's a lot of ways of getting from London to New York; the prices vary almost as much as the cost of hosting does. At the time of writing, BA are offering £103 for their cheapest Economy flight, £584 for Premier Economy, £1784 for a Business class ticket and £3257 for First. And you could always go by cruise liner or hire a private jet.
Fortunately we've all got a pretty good idea of what you get for your money in terms of space, comfort, food, attentiveness of the cabin crew and so on.
The hosting business is broadly similar: the more you spend, the more you get. Unfortunately even the 5 dollar a month providers are still going to make out like you've got the First Class cabin to yourself.
That's probably enough of that analogy, though I might come back to it from time to time.
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