You need the exact same people to run the infra in the cloud. If they don't have IT at all, they aren't spinning up cloud VMs. You're mixing together SaaS and actual cloud infra.
Before I drop 5 figures on a single server, I'd like to have some confidence in the performance numbers I'm likely to see. I'd expect folk who are experienced with on-prem have a good intuition about this - after a decade of cloud-only work, I don't.
Also, cloud networking offers a bunch of really nice primitives which I'm not clear how I'd replicate on-prem.
I've estimated our IT workload would roughly double if we were to add physically racking machines, replacing failed disks, monitoring backups/SMART errors etc. That's... not cheap in staff time.
Moving things on-prem starts making financial sense around the point your cloud bills hit the cost of one engineers salary.
Like what?
In AWS, it's straightforward to say e.g. "permit traffic on port X from instances holding IAM role Y".
You can easily e.g. get the firewall rules for all your ec2 instances in a structured format.
I really would not look forward to building something even 1/10th as functional as that.
Meanwhile lots of enterprise firewalls barely even have a concept of "zones". Its practically not even close to comparing for most deployments. Maybe with extremely fancy firewall stacks with $ $MAX_INT service contracts one can do something similar. But I guess with on-prem stuff things are often less ephemeral, so there's slightly less need.
Kubernetes is running on bare metal quite a lot of places.
S3 has excellent legal and auditory settings for data, as well as automatic data retention policies.
KMS is a very secure and well done service. I dare you to find an equivalent on-prem solution that offers as much security.
And then there's the whole DR idea. Failing over to another AWS region is largely trivial if you set it up correctly - on prem is typically custom to each organization, so you need to train new staff with your organizations workflows. Whereas in AWS, Route53 fail-over routing (for example) is the same across every organization. This reduces cost in training and hiring.
Network engineers do network engineering :)
That's why nowadays one would use a managed collocation service, not hosting a rack in the office basement.