For developing I have the same. On this server I have around 10 different shops running. The biggest one is a Shopware shop, similar to Magento and this Shop has around 50,000 products. It is fast, really fast, so I think you don't need a VPS.
Yes and a dedicated server wouldn't make it faster, because your problem is not the server. Most of all requests come from external hosts like Google, Facebook and so on. Kick them off and your shop goes 3-times faster, atleast!!!