For the record, since there's a lot of speculation going around here, web hosting is not my primary occupation. Taking on the hosting of websites other than my own happened rather organically, as they were all in a similar situation as I was with my own site initially (lots of experiences with bad hosts). Once I've taken care of that for my own website myself, I was in a position to offer it to other websites that were in a similar situation as well.
Before starting my own business, I've primarily worked in various IT project management roles, but I have a pretty broad range of experience in several fields, which often comes in handy. I'm in the same field and same type of work with my business now.
Running a gaming website (and providing web hosting to myself and others by extension) started as a hobby for me and it still is to a large extent. I've never made it my primary occupation because I expect I'd burn out doing it eventually, as it can be very repetitive and mind-numbing at times (I'm sure Myrthos knows the feeling). So as it is, it is just a part of what I do.
On my site, donations have dwindled to next to nothing over the years, so if it wasn't for the ads, I could have closed up shop years ago. I also didn't really enjoy regularly having to ask (beg) people to donate, as the way it goes is that usually only a very small minority of users end up donating and covering the costs for everyone, which is inherently unfair. Finally, when you're a business owner, you need to look at the bottom line as well. If I'm on call basically 24/7 (which is what being a web host entails), invest a number of hours of my time in a project on a daily basis and if it barely covers the running costs at the end of the month, it's not something that I could do long term past my younger years, when I had plenty of (unpaid) time on my hands.
The web hosting bit doesn't make that much money, but it at least needs to pay for all the expenses associated with it with a little left over every month, otherwise it just isn't sensible long-term. For the time and effort invested, the return is much less than if I put in the same number of hours into my core business, so if I didn't treat it as part-hobby, I really couldn't commit to doing it any more.
FYI, the donations system on the Codex is separate from my own business and is being managed by DarkUnderlord, so it doesn't have much to do with me.
I don't break down all the expenses in minute detail and then only ask people to cover the costs, because if we wanted to be fair, I would also need to put a valuation on my work invested on a daily basis and commit to X hours of work per month, but I don't want that kind of commitment constantly hanging over my head. The system that I work with is a compromise that works for me, so I plan on sticking with it.
We have the option to disable all the ads and get some perks with a modest donation on all the websites that I host, so I would definitely like to have this available for RPGWatch as well.
Oh and please, don't hang onto every word written on SP as completely accurate today. Most of what I've written there has been there for over 15 years, so naturally some things have also changed since then and could do with a bit of updating.