Agreed, that's really stunning - seen the analogy of cloud as the "modern mainframe" come up more and more recently.

I guess the (business) reason is that the centralized computing model enables enormous economies of scale. (Makes perfect sense from an operations point of view.)

What it seems to miss in the current incarnation/iteration, though, is the "power of distribution" - leveraging the fact that local compute capabilities (especially during development/integration) can help reduce the cognitive load, increase the efficiency, and thereby reduce overall costs.

There seems to be a tendency to focus mostly on the operational aspects, rather than the overall end-to-end developer journey. What remains to be seen is whether future iterations of "the cloud" will do a better job of embracing the power of distributed and/or hybrid.