We have a number of older P4's in the $50 range (and cheaper). When you own the hardware it's very easy to sell in this pricerange.
Look at it this way - 42u cabinet will run you about $600/month. Lets say we put 35 1u servers in there at $50 a pop, that's $1750/month - $600 = $1150 revenue. This doesnt count the bandwidth or admin fees, but it's very easy to make a profit on the older machines.
As Steve said, a Quad Core in the $50 range would be a tough sell, but it depends if things are being bundled with it - server management, extra bandwidth etc etc.