When you look at the cost of the hardware + hosting. Yes, it certainly looks and feels that way.
But if you've dealt with corporate IT, and had to deal with 3-6 month lead times on getting hardware, or politics to get your hands on hardware to get stuff done.
AWS is cheap. It gives you velocity.
If your company is large enough that it can offer the elasticity of resources that Amazon offers or even 1/4 of it... and you have an IT org that will let it happen. Yes, AWS is a waste.
But with AWS... when a project dies, you can wipe its costs out, people won't hold onto hardware so they have hardware for the next project, etc...
Trust me. I've been IT, I can spec and build rack systems. I am a software dev. And I've been a dev most all my career.
For 90%+ of orgs... they don't have the maturity and skills to handle that type of infra without substantially distracting from their primary business.