I'm not here to pick a fight against AWS. You guys have built a powerful ecosystem and it's definitely applicable to certain business cases.
Your points about building the same ecosystem as AWS on traditional hardware are absolutely correct, this is very difficult to get right. A lot of places simply don't. I have always said that AWS is great for loads where you need to start be able to easily scale up and down, something which is prohibitively expensive to do with your own servers.
But what you might not see in your position inside Amazon, is that for most companies it's much easier to hire developers/sysadmins for "traditional systems" than it is to find people with deep AWS knowledge.
Because AWS is such a large ecosystem the market of individuals with the domain specific AWS knowledge that your business needs is much smaller than regular old sysadmin/developers.
This means either it's very hard to find the right people, or you have to pay them multiples of what you would pay a standard developer/sysadmin. It's the difficulty of finding people to fill the role that vexes me most.
> What now do you do for: high availability, nearly instant scalability, monitoring, logging, alarming, deployment and security controls.
Ah, but you are assuming people who are using AWS are adhering to best practices and have all these set up, tested, and working in production. I've worked at a few companies with on site and AWS presence, and I can say that none of them followed best practices all the time...