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Assuming you have a shared hosting account that enables multiple MySQL databases and multiple domain pointers.

How many standard WP-installed websites can it hold without problem? (let's say each website gets around 1000-2000 visitors a day)

If this depends on who is the hosting provider, please refer to whom is the one you are speaking of (which will enable the creation of some basic range).

motivation: I recently asked a hosting provider to downgrade an account from VPS to share hosting, and they said it was not possible because of the number of websites and number of uniques (the installs are standard). I wish to understand if they are being greedy or just.

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up vote 1 down vote accepted

Number of installs is not determined by WordPress, it is determined purely by hosting resources and policies. From personal experience even one blog with 1k daily visits can border overusing CPU quotas on crappy shared hosting with overstuffed server.

If you want to force this through - request specific resource usage policies and hard numbers on what server load your setup generates.

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