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Surely its cheaper to drop a stack of servers at the start point and end point, treat everything in between as hostile and encrypt the hell out of it for transit over the open internet?

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In an ideal world, any traffic entering and leaving a private network would be encrypted, but the issue is with near-realtime services like VoIP and remote presence where latency isn't acceptable. When you add the large number of users that use these networks, the amount of hardware for both redundancy and performance load balancing becomes a problem.

I don't see how this is a problem? You just saved a ton of money by not building a cable.

The WACS cable (a fairly minor project) cost well over half a billion USD. I'm pretty sure that with half a billion I can do quite a bit of realtime encryption....

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