You are right with this analysis. The only thing to add is why Amazon still isn’t the only choice and why sometimes it is in fact better to not use it.

Your comment makes it sound like unless you know your growth pattern, can predict your spikes, don’t plan to pivot, and you know these things perfectly, you will lose. That’s not the case. The reason for that is that you have a quite significant cost difference between AWS and DIY. DIY is cheaper by a significant enough margin that you might be able to buy, say, double the capacity you need and still spend less. So if you made a mistake of up to 2x your growth and your spikes, you are still fine.

Even if you are a small operation, you still have the option to lease hardware. Then your response time to add new servers is usually hours, not days like if you were to go the full own-your-hardware route.

As an exercise, you can try to rent and benchmark a $300/month server from e.g. SoftLayer and then compare that against a $300/month EC2 instance. Chances are, you will be blown away by the performance difference.