The second point however is a stereotypical blanket statement. It's important to note that Anchor as a company designed and maintained the infrastructure of Github.com and now does the same thing for testflightapp.com; Both of which are high profile startups each of whom have traffic numbers orders of magnitude higher than most Australian hosting providers see across their entire network.
In the end, quality hosting isn't just about the hardware (linode, rackspace), but highly skilled engineers who can architect and provide solutions that don't 'just work' now, but scale into the future.
The problems I was referring to were simply the ability to keep from falling over at random times for varied reasons. Many providers they tried couldn't even handle this basic task. Sure, we could have paid for the expertise with a company like Anchor but it was more cost effective to look outside Australia.
As someone else said, bandwidth is expensive and travels great distances. But that's not the only reason either imho. Things are simply more expensive here. :(