As Wesley Chung noted in his reply on the GAE mailing list, GAE is designed for companies who get very unpredictable traffic. If you get a very predictable traffic, it's significantly cheaper hosting on AWS. Some of my apps previously cost $40 a month, now cost almost $300 per month. I can definitely run these apps on Linode for a fraction of the cost.

I picked GAE mainly because it was fast to setup, but I could have equally chosen Heroku over app engine when I first built it. In hindsight, I wish I had.