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I was assured that with cloud we wouldn't have a single point of failure like we did on-premise. I must have fallen asleep at my desk.

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That was never the promise. The nearest to that is the promise of multi-cloud or hybrid infrastructure, but neither of those have anything to do with outages of specific Microsoft services.

The "you can't possibly have better redundancy in your on-prem" was absolutely a sales pitch I heard to move to Microsoft 365.

The biggest site I work for, who went M365 hybrid last year, has incurred more Exchange downtime today than they had all of last year with their on-prem Exchange servers.

It sounds like you are talking more about product reliability of M365 than you are about enterprise infrastructure reliability. M365 is a Microsoft product. M365 has no bearing on the credibility of cloud infrastructure as a whole, which is what your original comment spoke to.

The service has redundancy, better than individual operators could provide on-prem. From the customer standpoint though, the service as a whole is a single point of failure: it either works or it doesn't.

Maybe not where you are but that's legitimately what our project managers were saying. We all knew better, of course.

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