A single downtime event on a single host will likely have costs that can never be actuarially recovered from, in this head to head. Pay the $15 extra bucks.
I think AWS would do well to expand massively its free tier. Talented startups in my world are starting to look askance at AWS fees.
1. Nginx config & tuning 2. Postgres / MySQL config & tuning 3. App server config & tuning
It is dramatically different config & tuning, so we might exist in a time where people overvalue familiarity & it colors their impressions of effort, but I don't think it's a long-term viable crutch to lean on either.
As to core services going down, I read you loud & clear, it does happen. From my experience, it happens way less often than outages on a single box though, or even a collection of boxes you're managing. And I don't know if there has been a time where there were simultaneous region failures in AWS -- and with dynamo global tables its easier than ever to get a multi-region app launched.
Pricing is the kicker for sure though. Your bill line is going to be higher. You're also priced in though which from a biz standpoint is huge. It's very difficult to budget failure, it's probably a hidden component in your engineering team costs. For startups this can be mitigated through AWS' accelerator-linked programs though, otherwise, I'd encourage any CTO / CEO / founder team to really think about how cost is not measured in the data center bill, but in that cost, plus engineer cost, plus customer retention costs, plus opportunity cost.