Yes, because letting someone who knows what they are doing run your database is in most cases a better idea / more secure than doing it yourself if that's not your main business. If you pick a reputable provider there's not really an incentive for them to not keep your data confidential.
Example: All the open MongoDB instances because the owners expose them to the internet with a simple configuration mistakes.
I'm a staunch believer that multi-tenant hardware and managed services are _obvious_ no-gos for privacy reasons.
But, having done B2B where i had to deal with security procedures/questionnaires/documentation/checklists from large customers, no one else agrees.
There definitely are companies that employ great engineers, follow best practices, and can be on par with big cloud providers, but generally you shouldn't really expect that. In such cases, I'd rather see they leverage managed services, instead of deploying their own servers.
For multi-tenancy, it isn't about trusting AWS/Azure/GCP, it's about trusting everyone you're sharing hardware with.
Cloud products are difficult to setup (AWS in particular). If you can't setup PostgreSQL properly, why are we assuming you can setup AWS properly? Look at the recent Endgame pen testing tool (1)
If your paranoia is justified (which it may be, depending on your needs), you need to host the machines in your own datacenter
Indeed! That's the reason why the author shouldn't write "((use)) a managed database service", à la "whatever you have in hand, screws or nails, use a hammer!"