I came to know about BHW from my employer. (Used to make me build autoblogs for himself, and sell to others)
This is my first post, and I think I am able to contribute something positive to this forum.
Whatever you use, the point is if you are making too many blogs on one hosting, the obvious impact is RESOURCES.
Autoblogs use up too much system resources. So, obviously, when they are used in mass they affect the server a lot.
For an estimate, I had a Basic server where I used to store the autoblogs I make for testing. On that server, I deployed around 100 blogs, when the server gave up "Out of RAM" loads.
So, you just need to manage your resources on hosting providers.
HostGator is awesome, but Yes, you need to take care of the fact that they are the first to throw you up, if they find you overusing their servers. my best advice will be to use HostGator only if you are having your Own Dedicated Server with them.
Other reasons for multiple hosting accounts (IPs) include:
1. Better SEO structure (interlinking your autoblogs -> higher serps)
2. Less Google Sandboxing fear
3. Less spammy appearance
-- meleeCore