I find it interesting that these comparisons always pit AWS againsta colocation.

It would be much more interesting if the comparison was between AWS and dedicated servers. Dedicated servers have all the benefits of colocation, only you don't need to deal with the hardware. The DC takes care of the hardware, all you have to do it administer the server.

I find dedicated servers to be very cost effective. You can get off the shelf servers in minutes and if you need custom hardware that's only a quote away. Most providers will offer month-to-month billing, so there is no lock-in.

Often dedicated servers are even cheaper than colocation when you add up all the costs of hardware, racking, sparing, financing, etc.