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I worked at a software shop that survived not one but two fires.

This was before cloud.

Servers on premise with regular backups stored in the cloud can still be cheaper than offloading all your compute, storage and backup to AWS.

The problem is not having the backups, it's restoring them. How do you restore backups when you have no servers to restore them on because they all burnt down?

You trivially and quickly lease them from Hetzner, OVH, or literally any of the other shops that lease out dedicated servers? Or large cloud instances.

I don’t understand why you’re artificially constraining this? When we had colo’d servers, we still used cloud services where it made sense (especially S3, scaling storage sucks). I don’t think people are arguing for never using anything but your own equipment.

You really haven't looked into the possibilities with dedicated hardware vendors in a very long time.

Because if you have your own servers you are forbidden by law to back up data to another location.