After working for a company that spends millions of VC money on AWS per year I can also say that infinite cloud scaling is a myth. We had all kinds of downtimes due to AWS over the years.
No, you just had downtime, full stop. Failures are inevitable, regardless of whose datacenter you're using. Failure-tolerant architecture design minimizes (or eliminates, if you're lucky) the downtime caused by failures. I'm not saying that's easy or necessarily appropriate depending on the stage of your company, but foisting responsibility onto AWS is missing the point.
Esp if you are not vc backed and infra costs are already near the same order of magnitude as most of the dev team and are running into scaling issues…