I think it's a lot more expensive than App Engine though. You quickly get into hundreds of dollars a month range for just a few extra features and two running processes.
I'm not sure I trust Google App Engine; it's a roundoff error for Google. Why should they care if something goes wrong? Heroku cares about Ruby webapp deployment the way Google cares about search.
Most people won't require every addon, and there's a free or cheap option in every case. Yes, you can spend "hundreds of dollars a month" but not easily
2 x processes + 20GB database + unlimited bundles + SSL ($20-100/month depending on your needs) == $91-$171/month. And that's for just two thin processes with a few extra features that are generally required for most apps.
It jumps to more than $200 if you want just one more Thin process or a background worker, etc.
I'm not saying that there's anything wrong with Heroku's pricing, but I wouldn't considering it a "cheap or free web-based tool".