I am not sure I'd agree that Netflix could've been more profitable if they went with their own DC. I think Netflix does not utilize that much hardware. Their streaming is on their own CDN, which I heard that are placed directly in the big cable companies' DC. Tracking and storing user profiles and other meta data would not require a huge amount of hardware. I think Netflix also does quite a bit of video encoding and analytics, but these workloads would fit well with EC2.