$1100+/month + $700 in setup fees? Probably. EngineYard is friggin expensive. I would have gone with something like Linode if you're starting out and need to be frugal.
They had some kind of deal with EngineYard, where EngineYard customers got free devjavu service. I'm pretty sure they got a discount on hosting for that.
Since EY's customers are mostly Ruby developers, it must have been hard competing with GitHub + Lighthouse:
We did have a deal with Engine Yard. We were one of their first partnerships. It was initial a verbal agreement for exchange of services, which meant free hosting! Eventually when they got big and wanted to formalize the agreement to a cash exchange, they had less use for us and so while getting a major discount, we still started losing money.
Ultimately it was time that was the reason I decided to wind down. I barely had time to keep it running, let alone all the cool stuff I wanted to do with it. If I had the time to switch hosting providers, I would have.