[timothyb89]

It definitely can be, if you write your app assuming that you are working with a traditional server. You're very directly charged for writing inefficient apps. I have a moderately popular app running on the AppEngine right now that initially had similar cost problems, but spending a few days with the cost profiler can resolve most issues. You have to be particularly smart about caching and datastore queries. What I found in the end was that after proper optimization, I was able to get a better value out of the app engine than with a normal VPS - but it definitely takes some extra work to get there.