Scale horizontally and you're often constraining and or complicating your design/architecture, but you can handle outages far better, if not seamlessly. It's much harder to get right, so it's usually best for more senior teams that have specific need for it.
Limited horizontal replication is not the same as PAXOS.
When folks talk about scaling up for stateful resources (database), this typically includes having stand-by replicas to which one can fail over within seconds.
Scaling up the DB and scaling out stateless compute nodes is more than enough for many, many use cases. Having a DB machine with one 1TB RAM isn't anything special these days.
How fatal[1]? Not all outages are fatal. Scale vertically and you'll have some downtime if any node between (and in) your user and your system goes down. For 999 out of a thousand businesses, it won't be fatal.
If your business is so fragile that the first 24 hour outage kills it, then it would have been killed anyway in the near future.
[1] I know, this is liking asking "how pregnant?"...
Setting up something like a read replica on RDS (or frankly even a DB you manage yourself is pretty trivial, especially if you're using it solely for availability and not actually reading from it.