Looks like a great explanation for why the pricing model changed. There must be a gazillion apps around that are also incredibly wasteful by accident, and in the old model nobody had any reason to debug and fix the issues. After all, the code looked totally innocuous.

Awesome write up of the new billing system. New post with some changes: http://point7.wordpress.com/2011/09/04/appengine-tuning-1/

Holy crap. You can have a good dedicated server for the price of 2 days of google app hosting.

Try caching some of the "Datastore Reads", if possible, you're bleeding money.

Have a read of the analysis there. It looks like the reads are just a bit of crap code, optimisable and probably can be eliminated.