PPC works, but it depends on the clients you're after. If you are a small web hosting company, and you're essentially a reseller for another datacenter, advertising on WHT or other places like that will just cost you money. People want the source (most times).
If you're a reseller, I advise getting into different niches and then targeting the consumer level at that point. Going head to head against other web hosts usually ends up being a pricing war, and at the end of the day we all know that price doesn't always equal best.
It was be terrific if you were able to back your statement with some actual arguments. Which directories have you tried? What kind of CTR did you see? What kind of PPC rates was the end result for you?
PPC is still working pretty well, and even some very large firms whose hosting portals are already on front page of Google for their targeted keyterms are still heavily investing in PPC campaigns, why? Because end users would see relevant ads on blogs, forums, directories and other sources of information as they surf and the net and then click on them and study the packages and may even place orders.
Having said that, you can also spend thousands of dollars on PPC and still do not feel very satisfied, again why? Because issues like targeting the right audiences, putting great ads and links in front of potential customers and even selection of the wordings of the commercial can greatly affect the outcomes. You can also consider renting a monthly ad position on a few directories for the start.