We routinely have people say that we should offer various different things, but at the end of the day, this is business. If there's not enough demand for it, there's just not enough demand.
We had a client tell us that while we offered a version of software (retail $195, we sell for $100) that this wasn't the one he wanted. The software maker also makes a $495 version, and wanted a discount on that one.
The fact of the matter is that we buy the software in bulk (10 licenses at a time), which is why we can offer a discount. The client stated that we should buy 10 of the larger priced so that he can get the discount and we would surely have more business. In the 12 years offering the software, we have been contacted MAYBE 10 times for the higher priced software.
So while things may make sense to a client, it sometimes is just not good business sense. You offer services to make money, and while pleasing the customer is an essential part of making money, you can't always please everyone.
Personally, I'd stay out of tiny VPS packages - there's usually not much money in it, and usually a lot of headache on your part - but that's just my opinion. Other places *DO* make good money with the tiny VPS plans.