Everything above really sounds like it's just regurgitating AWS sales person talking points.
Sounds like a systemic management / CTO-level problem to me if a company isn't willing to put in place the hiring practices and compensation, documentation systems and operational procedures to deal with that sort of concern.
If your core engineering staff is turning over multiple times for arbitrary reasons you have other problems to deal with.
> Engineers can't set up, maintain, and do on-call for the colocated setup without subtracting from their primary working hours.
If a company can't hire datacenter techs to install hardware, cables, and swap hardware as smart remote hands, maintaining as little as a couple of 45RU cabinets of gear, you also have other management/systemic problems to deal with. I'm looking at this from the point of view of a facilities based bare metal ISP that owns/runs all of its own hardware, and can tell you it's not rocket science.