I don't think that's quite accurate. You are either ignoring the currently inflated prices of the graphics cards it would take to build such a system, ignoring some of the parts required (extender cables, ram, hdd, cpu, mobo, case, shipping, etc), under-powering the PSU, or assuming that everyone will overclock (which I would argue you shouldn't do because people need an apples to apples basis when discussing hardware power/costs).
Well this was just an off the cuff rough estimate, 5870s used to go for $225, but I see people have been bidding them up to $275 lately, sheesh. Well anyway, 5x$275 = $1375 + $175 mobo + $175 PSU + $40 CPU + $20 ram + $30 HD + $100 custom case = $1900. Those are desperation prices, so I'd say that's a good ceiling.
This is how vlad makes his money. He locks you in for 4 months, at a cost of which can pay for the equpiment you are renting flat out (as I recall he uses 6990s so his profits are a bit lower but easier to manage) twice over (your rig + a rig for himself). So for this to be seen as reasonable for one months time you would need to pay a slightly higher premium. It's still a pretty good deal imho (for the renter).