I guess my bigger point though, would be that when using something like AWS, I don't have to think/spend time on a lot of implementation details. When using colocation services/hardware/failover, I'm just adding a bunch of little things to my daily tasks and responsibilities. Sometimes this is a big deal (like in a bootstrapped two man team) and other times it's not.
Ultimately, I think it comes down to priority instead of possibility. If your company lives and dies on having reliable servers, you should probably roll your own. But if servers are 'just' a technical detail to your overall business model, then a cloud solution can be well worth the additional cost
When you're using something like AWS, you absolutely need to think about implementation details. As we've learned a few times now, sometimes AWS has datacenter-wide outages. You need to stripe across multiple availability zones, keep off-site backups, etc.
So yeah, you gotta think about it. A lot of the time, public cloud is the correct solution; however, you should have a solid understanding of what you need to do to run reliably in that cloud, how to build redundancy in the cloud you pick, when you might need to move to a different solution, and how to make those processes easier.
I don't think I said that you don't have to worry about implementation details at all, just that a cloud based solution like Amazon is often many orders of magnitude simpler than building/maintaining/repairing/replacing/updating physical machines at a co-location center.
We could argue about how many orders of magnitude, but I agree. It's absolutely easier in some ways. I'm just saying that it's easy to fall into the trap of thinking that EC2 (or whoever) is abstracted away from hardware failure/geographic problems when it definitely isn't.
http://arstechnica.com/business/2011/09/google-devops-and-di... is a bit overdramatized but the final section is a great summary of real stuff you need to think about on EC2, or any other provider. Again, I know you're not minimizing these issues, but some people certainly do.
Ultimately, I think it comes down to priority instead of possibility. If your company lives and dies on having reliable servers, you should probably roll your own. But if servers are 'just' a technical detail to your overall business model, then a cloud solution can be well worth the additional cost