You're very right.
hosting is really a strategic matter in the Internet.
Dedicated server have as well become a lot cheaper than a couple years ago, and this make the price a smaller matter.
You can nowadays easily find a (real and usable) dedicated only costing couple time more than a shared one. I think quite some people with several shared hosting would be better, and even for cheaper, hosted if they'd rent a dedicated for all their websites.
This to tell that it's not really a cost matter to go for a dedicated, because in most case, if a shared hosting is to small it means you already have enough visits to finance at least most of you server expenses with few adds.
The real matter is admin, as it can be quite a pain for people with few experience.
Cpanel though can make it as easy a dealing with a shared hosting, you just have to deal with more responsibilities by yourself, but as long as you do regular (daily) backups, and took the time to train yourself a bit on putting all back online from scratch, it should never be a problem.
Administrated servers like the 1&1 offer you mention can as well be useful for non technical people, but even in this case, you responsibility is greater than on a shared hosting, the company won't do everything for you.
My personal experience is I started with a dedicated form the very beginning, as I wanted to have dealt with dedicated server for some time before it would have become really necessary. Was a bit more expense at first, but in the end I do not regret, as I did not have to deal with migrating under pressure, and had the time to peacefully set everything as I wanted.
Never tried VPS, I'm not convinced it's really useful as dedicated can cost less than 20€/month now.