As I understand things, the load generated by this site means that it requires a dedicated server. The low-cost offerings are for shared resources. The webhost I use has prices similar to iPage, and I've been quite happy with them. A dedicated server there costs about $720 / month, which is commensurate with Robbie's yearly donations ask. iPage's price for such service would almost certainly be close to that number. I don't doubt there are a few other expenses in addition to hosting, as well, such as the vBulletin support contract and plug-ins like the search module.

As far as I am aware, we've not been in danger of missing the donations target so far (you'll notice that we're already a quarter of the way there, and we're not yet out of January), and the site does generate some amount of ad revenue, which offsets some of its costs. And in case you're wondering, donors receive no extra benefits. There is no donors-only hidden forum or other bonuses except for the "gracious donor" title.