Hi Scott,
Your Developer is right, I faced same problem with one of my client , he has 200K SKUs in his inventory and we start to build up with magento 1.9 on shared hosting and than we realize it can not give best performance in fetching products from database so we ask vps hosting and than all speed related and other issue solves as in VPS we can manage all variable by ourself rather than shared hosting doesn't allow it.
thanks
