Granted, but it can make sense at even smaller scale. Say 8 servers. Or, I know one group of folks that were tempted by a beefier database machine and instead happily moved to such an appliance. There's a lot of ways to spend dollars that makes sense depending on what you are trying to do. (Trading dev cycles off against hardware etc).

Personally, I don't use the appliances because for our extremely latency-sensitive apps we do it all from scratch for various reasons. For large scale storage we build off commodity machines. One of our prototypes runs very happily off machines from scalableinformatics.com - highly recommended.

Horses for courses and all that..