I've worked for a competitor to RackSpace for ~30 years. They're not trying to compete with Google. RackSpace has always sold itself as a premium product, especially on the support side:
Their servers have always been more expensive
Their colo has always been more expensive
Their VPS has always been more expensive
Since starting they've sold themselves on crazy good support and uptime. They don't have the market share/automation of Google or the bulk goals of a dollar hosting provider. Ideally when you call RackSpace you're getting a live person, and the service uptime is 100%.
The short notice sucks because of their customer service expectations. But pricing is right in line with premium price for premium product. A similar two-facility setup for email redundancy with 24/7 live support would reasonably be $10/mo.