It's different for everyone.
If your 500 servers are for storage, S3/GCS will beat you in cost. For compute, that might be a different story, but then you still have to consider regionality, networking, etc.
If your 500 servers are for storage, S3/GCS will beat you in cost. For compute, that might be a different story, but then you still have to consider regionality, networking, etc.
At least from my view, there's a difference in backbone versus corporate space networking, but you're right, most everyone won't ever realize any savings from that side of things.
I can vaguely recall over the past several years single availability zones having short periods of time where single instance types were unavailable, but never the entire region... The idea that this happens "a lot in the past year" for the entire region isn't my experience at all.