Fair, I was thinking of this in the non-cloud perspective where efficiency improvements can push you to upgrade even if the hardware still works. In cloud provider mode it makes sense to keep it around as long as it still works and it's not too annoying to run. It doesn't really matter how (in)efficient the hardware is because you set the pricing to keep it profitable as long as someone's willing to buy it.
You would typically be right. However, the saying as of 2013 was "At any given second there is always at-least one new computer being plugged in, to support S3's growth."
> Every rack that is sitting there is an opportunity cost for another efficient or more profitable rack.
If AWS wasn't already supply side constrained on new hardware to fill new AWS data centers, you would be correct. However, they do not yet need to re-use those old racks, instead they are accelerating how many new racks they are building.
But maybe the chip crunch is a current bottleneck, or results in higher prices for new hardware? If so, there's a reason to delay upgrades and run older hardware a bit longer.
This is just guesswork. Supply crunches aren't predictable from first principles.