The story of how GM outsourced/spun off its IT department and then brought it all back in house once they realized it was a competitive advantage should be required reading.
Aren't fads wonderful?
In a couple more decades cloud computing will be almost ubiquitous and yes, it will become more regulated.
The AWS GovCloud region is already a move in this direction. Also the private cloud they are building for the CIA shows that AWS is willing to jump through various hoops for $$.
For a lot of companies, they're viewing moving to cloud systems as a sort of "second chance" to green field IT more inline with what they were hoping for out of their datacenters they built out decades ago. In a lot of these cases, server deployments can take weeks, months just to have some random CentOS or Windows 2008 R2 image plopped on there when people just want to test a couple pieces of software from a vendor.
Cockcroft's right about how auditing datacenters for security is such a pain due to disparate / badly integrated tooling that the cloud will become much easier for performing audits. So even if it's a little less "secure" than your existing datacenter (I would bet everything I've got that most Fortune 500 datacenters are far less secure than what Amazon has setup) you will come out ahead on dealing with incidents faster and cheaper.
I'm working directly on one of these datacenter exodus projects named in this article and the cost savings early on are already monstrous compared to the charge-back that's done internally, and our internal cost to support cloud is projected to scale logarithmically as opposed to super-linearly while maintaining our in-house IT. The amount of (typically unhelpful, terse) support staff required to support our IT is absolutely insane and most of the time the IT budget is so strapped you can't even get the budget to upgrade any hardware ever again, so moving to a constantly-improving cloud is a better long term proposition by that metric at least. The internal IT is a stereotypical example of a real-world enterprise datacenter with a hodgepodge of 25+ different vendors' tools from different fads and different account managers' legacies from years ago that are impossible to consolidate together effectively. No enterprise software vendor likes to make integrations with anyone else without a partnership agreement and the overall engineering results are atrocious and fundamentally much more expensive and high-risk than just throwing everything into a third party's highly reputable cloud environment. Meanwhile, there's a massive body of software now that works with AWS and as these large corporations start to acquire companies that are already deployed to AWS, it will make M&A cheaper and technically higher likelihood of follow-through.