Note that I work for HashiCorp so I have a clear bias. I tend to shy away from these comments because of that but there is a certain addition I'd like to add here. The other comments around this are good so I won't talk about those.

The surface area of Vault capabilities is much larger than EC2 parameter store and through the lens of our paying customers, most are using Vault for many more of the backends (the most popular probably being PKI).

For pure AWS-based companies, parameter store could provide a fine solution for basic key/value secrets! I don't want to bash at all, I just wanted to make sure for any readers that they don't mistake Vault for purely encrypted K/V.

if you are not on Amazon, you are forced to use something other than Amazon's services.

Another would be vendor lock-in. If your code is tied to Amazon, you are then also tied to Amazon, without engineering resources to divorce.

Another reason is, if you are cross-cloud, and not tied to only Amazon.

Also @organsnyder's point in the other comment is also true.

But certainly, if you are married to Amazon, there is nothing wrong with staying married, if it's working out for you and using the EC2 parameter store w/ KMS.

Vault can also work under Amazon just fine, so you can use vault under Amazon, and avoid some of the above reasons.

Many organizations (especially large ones) are hesitant to outsource this function. There is certainly an argument to be made as to whether it's a wise stance, but it is the reality.