> Why hasn't the industry come up with an alternative?

The cloud is the solution to self managed data centers. Their value proposition is appealing: Focus on your core business and let us handle infrastructure for you.

This fits the needs of most small and medium sized businesses, there's no reason not to use the cloud and spend time and money on building and operating private data centers when the (perceived) chances of outages are so small.

Then, companies grow to a certain size where the benefits of having a self managed data center begins to outweight not having one. But at this point this becomes more of a strategic/political decision than merely a technical one, so it's not an easy shift.