First, AWS, Azure and GCE are not just "Joe Blow's cloud server", they are multi-billion dollar companies, and they all can provide hosting environments compliant with a multitude of security programs including SOC 1, 2, 3, PCI DSS, HIPAA, etc.
If a hospital can store patient records on AWS, why can't Delta store my flight records there? If the government is worried that a public cloud leaves them open to terrorist attacks, then they can sponsor them to run on Gov Cloud for better isolation.
But more importantly, moving a complex high volume legacy system to "the cloud" is no panacea, whatever dependencies or lack of redundancy that caused this failure could cause the exact same failure mode in "the cloud" (plus it can open them to all new failure modes).