Your right on some systems it may not work, however there are some workarounds, and over time we hope to get past them. I think the thing to remember with this plugin and plugins that are similar is that they are quite complex. There are many variables to consider when working around complete migration and backup solutions. This is why there are only a few plugins like it in this space that are free, and even the commercial solutions run up against many of the same issues.
The issue with shared low cost hosting is that many restrictions are placed on bandwidth and process run-times within your sandbox. In order to run a complete database backup and scrub that data, along side archiving all the files on a WP system you can run into timeout issues.
The PHP ZipArchive class (currently what the Duplicator uses) has some limitations itself. Many hosts also restrict what calls are available to programmers in the PHP API on their systems, which adds another set of obstacles. We are currently researching some other approaches to the archive process.
At its current version the plugin does run much better on smaller sites (sites under 200MB) because of restrictions placed by some hosting providers. The plugin will eventually make it past these hurdles as the code is fine tuned to deal with the 1000's of different configuration scenarios. In the meantime I suggest just that users just exclude the bulk of their data from being archived and then manually FTP it over.
The bulk of most web sites resides in the wp-content/uploads folder. This data can be excluded from the archive process as to speed up the overall process of archiving your site and get past any system constraints that may come up with how the host has configured your server.
I know for some that process is not except-able, and that's where I usually point them to look into a commercial product (of which have many of the same problems and constraints).
I have ran the duplicator on some hosts where the archive was over 1GB without issues, while other hosts just won't process the sites no matter what the size. So to your point it can 'unusable' on some hosts while other hosts it works without a flaw.
Overtime and with help from the community we should be able to work past many of these hurdles...