I've gotten the same recommendation from them. I complained because they pulled the network connection on the drive connected to the database and completely torched the drive. They were like: well maybe you should consider running multiple database machines with replication so you can survive the next time we screw things up.

This is true for all VPS hosting. They're cheap because they're commodity hardware that sometimes fails.

Full VPS backup should be standard feature of all premium providers...

You'd think, but then they lose that easy upsell.

And get tons of support requests and risk their brand name.

This sounds to me more like a procedural than a hardware failure.

I was told it was to avoid changing my DNS when I spun up a new server. With the load balancer being $50/month; that was the pitch that put me off Rackspace.

The LB itself (in IAD) is $10.95/month + traffic.

This was exactly it.

I don't know about the poster above, but commonly load balancers can be used to do SSL termination, which can significantly improve application performance.