How much is reliability worth to your business?
Sometimes a VPS can be a step up from dedicated, since VPS's usually run on enterprise hardware (redundant power supplies, hardware RAID controllers etc). If you compare that to a dedicated box, which often just has a single IDE disk, its a big upgrade.
VPS's usually lag behind in performance when your server needs to do many disk writes, as disk time is also shared among the other VPS's on the same hardware node.