I do agree it isn't suitable for small miners due to the need to run a bitcoin node, although some people do that anyway. The p2pool part itself is minimal.
Most of the new ASIC hardware either includes, or can be controlled by, tiny computers like a Raspberry Pi or a BeagleBone.
Mining on a standard pool means no need to store the blockchain, almost no CPU or memory requirements, and no network bandwidth required for all of the transactions.
Compared to that, runnng a p2pool node
does require massively more resources.
Massive is relative. By your definition $1 would be "massively more" than $0.01 ("It's 100 times more!") but its still only a dollar.
As I said,
if you are running a bitcoin node already, the added cost running a p2pool node is minimal. Certainly not everyone does have a bitcoin node.
That's a small price to pay for for the benefits of immunity from the risks of pools being dishonest, getting hacked, or just having screw ups.
In fact it doesn't require any resources at all since you can use an existing public node.
Which opens you back up again to your pool being dishonest or incompetent.
The risk is much lower because the pool never holds the coins. You can verify -- independently (try that on a centralized pool) -- that your shares are being accepted (and will be paid) by looking at the current payouts on any
other public node. Even eligius, which claims to make coinbase payouts, has had a huge amount of coins going to their own wallets recently. So far all of those coins have been paid out (if slowly) but this makes them a big target for hackers and exposes everyone to the risk of large operator errors. At times there has been over 3000 BTC being held and paid out "manually."
The other reason it is unlikely you get ripped off by a public node is that each public node tends to be very small. There is so little incentive to be gained by a public node operator skimming a small number of shares it's very unlikely to ever happen. Skimming a tiny (or maybe even not so tiny) amount from a big pool, by contrast, might well be enough to get rich.
The primary reason to use p2pool is to 'protect the network'.
Most new miners don't care about that.
That's one reason, but not the only reason. Guaranteed coinbase payouts are another reason, and potentially lower fees (not compared to ghash.io but compared to nearly all of the others).
If a few large miners do care about protecting the network, and a bit of a nudge can get them using p2pool, that too can make a difference.