"Lousy", in this case, is a relative term. I'm referring to the kind of restricted-resource shared hosting that many blogs run on -- assuming, that is, they're not using a hosted blogging platform like Tumblr or Wordpress.com itself. "Lousy", in this sense, means lousy as compared to someone running a VPS or their own co-located iron. The performance of most any shared Web host is never anything to write home about.
But here's the thing: Lousy Web hosting makes for a great testing environment. If my software can run well under the constraints imposed on it by shared hosting, it can run well pretty much anywhere.
One of the first things I learned about developing any project for the Web is how much disparity there can be between your local testing rig and an actual live deployment. Example: When choosing tags for a page, there's a certain amount of back-and-forth between the server. On shared hosting, this created long lags where nothing seemed to be happening. This gave me an incentive to add some kind of visual feedback to indicate a conversation was taking place with the server -- and to start keeping an eye out for similar UI improvements that might only pay off on shared hosting.
So, the reason I run my blog on lousy hardware isn't because I don't want it to run well. It's because I do, and that's one of the ways to find out how well it runs in the real world -- and not my lab.