WRONG, SIR!
It is true that up until recently there weren't any options shy of running your own servers, and hoping to god they scale. I still play that game every day.
BUT BUT BUT, welcome to 2010, you should check out Heroku. It's for Ruby/Rails,
but there's lots of others like it, Heroku simply being the best example. They call it Infrastructure as a Service (IaaS) and after having the pleasure to work with it, it's a new technology I'm geeked on. Basically, you upload your code, it gets hosted. On Heroku, we get this bitchin' little slider widget that we can crank up to beef up our site -- I love shit like that. You can think of S3 as being IaaS as well, but with only HTTP support.
PHP support is a whole nother thing. I've seen five or six starups offering similar services with PHP support -- Some specifically designed for PHP apps, some designed to be multi-tenet. Personally, I'm migrating three different personal projects to
DotCloud as soon as they approve my beta invite, which they assure me I'm "at the top of the queue for". Dotcloud seems to be the most robust offering that supports what I want (django, redis, hbase), but they say they support PHP as well.
If you're looking to really get your next-level-shit on, I feel pretty confident that IaaS is the right way to do it.