In U.K. English the use of the word "arse" is derogatory and has connotations of inferior, below par, poor quality. Overall it is a ruder word than it appears to be in U.S English. Cheap arse in the above context translates more accurately into the U.K. English "cheap skate" or "cheap and cheerful" which is closer to meaning cheap in the sense of very good value for money and useable while not top quality.
Two nations separated by a common language.
I am from Scotland.....always used arse, meaning ass...aka, buttocks.