It’s definitely a thing, every major metro has tons of data centers doing it to various degrees of success. For the most part it’s for small/medium folks, as larger buy and staff their own equipment, and many smaller do VPS or cloud for various reasons.
Dedicated is starting to make more sense as cloud prices are kinda nuts + tooling is better now, so ‘roll your own cloud’ is becoming more feasible.
It just doesn’t get as much press as the big cloud offerings, and most of them are relatively local players specializing in their region (and associated network/property). OVH has several large DCs selling dedicated hardware for rent here in the US.