If you do it yourself, you don't just have to worry about money, but also how to hire good operations people, and what effect all those extra people are going to have on your organizational structure, internal culture, etc.
What I meant by "And then they would have to hire smart operations people" is that that is both (a) challenging, (b) fraught with risk, (c) not something anybody at Netflix with a sufficient seniority was interested in doing.
It wasn't that those staff cost a lot of money, though at the time, Netflix was paying a bit more for infrastructure staff, it's just that nobody was interested in building an operations empire. If they'd had a Chief Infrastructure Officer who had a passion for doing it, Netflix would have paid approximately 20% less for their infrastructure costs. But, at the end of the day, given they didn't have that CInfO, and 20% less on infrastructure wasn't that material to their business, they just outsourced it all to Amazon.