For businesses with <10 servers and half an IT person, the cost difference is practically irrelevant. EC2+EBS+snapshots is a magic bullet abstraction for most scenarios. Bare metal is nice until parts of it start to fail on you.
I can teach someone from accounting how to restore the entire VM farm in an afternoon using the AWS web console. I've never seen an on prem setup where a similar feat is possible. There's always some weird arcane exceptions due to economic compromises that Amazon was not forced to make. When you can afford to build a fleet of data centers, you can provide a degree of standardization in product offering that is extraordinarily hard to beat. If your main goal is to chase customers and build products for them, this kind of stuff goes a long way.
Long term you should always seek total autonomy over your information technology, but you should be careful to not let that goal ruin the principal business that underlies everything.