Host all website in dedicated server or vps(all VPS are in one dedicated) will be the same if the dedicated server is down. The only difference is that if you are hosting each websites in each VPS, you can provide root access or any access to the customer who owns one website in one vps, they are not able to access contents in other VPS if even they have the root access to the VPS.
We recommend you to host all websites in dedicated server so that you can use all the resource of the dedicated server for web hosting. If you split that dedicated servers into VPS which will use the resource for running virtualization too.
You can use dedicated IP for each website if you have multiple IPs in the server. Its just needed IP based virtual hosts in apache configuration.
Without a proper website isolation with software like cloudlinux, it's not really safe to host all websites on a single dedicated server, in case of attack/ddos/infection, you may loose all your data and all your websites will be done until you restore them from a backup.
And it's pretty hard to use all resource available on a dedicated server with a single MySQL instance. With virtualization systems like LXC, host server doesn't require a lot of resources, and you can use a MySQL instance for each website, or for a websites group.
SN1 and SN1 is still in same server, if your dedicated server is down then multi vps in this case will not be effective.
Yes, I'm talking about using several VPS instead of a dedicated server. It will not be more expensive, you will have redundant DNS nameservers and a single interface to manage all your websites.