I had no idea renting entire dedicated servers was so cheap (and came with all those other things as well) -- makes me wonder why VPS is even a thing since if you go the KVM route you have to set up everything yourself anyway... What am I missing?
That's an odd kind of colocation. Typically you'd buy a machine outright, colocate it and maybe sell it when you're done.
> makes me wonder why VPS is even a thing since if you go the KVM route you have to set up everything yourself anyway... What am I missing?
VPS are much smaller and are typically used by people buying on the very low end of the market, people who won't pay $40/mo for a server. They're also much easier to find in places like the US. There aren't many budget dedicated server providers in the US like there are in Europe.
Typically cost efficiency looks something like this: owning DC < colocation < dedicated server < VPS < Cloud
But also, the speed and ease with which you can change your infrastructure looks something like this: Cloud > VPS > dedicated server > colocation > owning DC. There's a tradeoff to be made.
OVH's SoYouStart has 4c/8t (Xeon E5-1620v2) + 16GB DDR3 ECC + 2x2TB HDD and unmetered 250Mbps bandwidth for $34.99/mo: https://www.soyoustart.com/us/essential-servers/ (and there are a bunch of other options if you're wiling to go to $42).
Online.net has a Xeon D-1531 (6c/12t) + 32GB DDR4 ECC + 2x250GB SSD and unmetered 300Mbps bandwidth for 29.99 EUR/mo: https://www.online.net/en/dedicated-server/dedibox-classic (and again, more options slightly higher)
Hetzner's serverbidding has a Xeon E3-1245v2 + 16GB DDR3 ECC + 2x3TB HDD and unmetered gigabit for 33.61 EUR/mo: https://robot.your-server.de/order/market
There are other options around too, these are just the big, well known ones.