I've written vigorously (in previous comments) for using cloud servers like EC2 over dedicated hosting like SoftLayer. I'm less sure about that now.
An issue at Amazon, or Rackspace, or Linode, or Slicehost need not imply failure at other providers and cloud as an alternative to dedicated is still as viable as ever. Amazon tanking does not mean everybody needs to run back to dedicated, and my pet peeve is that when one provider takes a crap everyone paints the cloud as toxic.
When ThePlanet's facility exploded a few years ago I did not hear lamenting that dedicated hosting was doomed. When an airliner crashes we do not say air travel is doomed. I do not understand why people rush to paint cloud as a toxic choice in light of a failure of a certain player. Admittedly a big one but there are others too and you can move.
Providers like Linode are almost exactly equivalent to dedicated hosting. They just administer the hardware for you and pay the remote hands bills. Same for Slicehost and Rackspace. It is simply far easier to wipe your instance and start over and for all intents and purposes it acts like a dedicated box. You need to administer it like one too. Most failures of the "cloud" are really designing your application in violation of the fallacies linked elsewhere.