Our digital memory shouldn't be in the hands of a small number of organizations in my view. You're right about cost effectiveness. There are pros and cons to both but it's not just external threats that have to be considered.

History has always gotten rewritten throughout time. If you have a giant library it's easier for bad actors to gain influence and alter certain books, or remove them. This isn't just theoretical, under external pressure IA has already removed sites from its archive for copyright and political reasons.

There are also threats that are generally not even considered because they happen with rare frequency, but when they happen they're devastating. The library of Alexandria was burned by Julius Caesar during a war. Likewise, if all your servers are in one country that geographic risk, they can get destroyed in the event of a war or such. No one expects this to happen today in the US, but archives should be robust long term, for decades, ideally even centuries.