Funny analogy, since all data centers DO have their own generators: they're not restaurants.
Instead of running their own generator (server and storage), for those startups who don't need to, they can use Amazon's power, AWS.
am I missing something here?
If your site is your personal blog or something not important, then downtime might not be a big deal. If you don't have the money for a backup electricity provider then you have to take your chances also.
Running things yourself is no guarantee of uptime.
The only real fix is to maintain fully redundant systems, which is extremely expensive. Otherwise, put up with downtime sometimes, because no other system will fully protect you.