Naive question: don't people who care about resiliency have their services in more than one datacenter? or datacenter failure is considered such a rare event that's it's not worth the cost/trouble of using more?
That being said, there is still an added cost and complexity to operate in multiple AZs, because you have to synchronize data across the AZs. Also you have to have enough reserved instances to move into when you lose an AZ, because if you're running lean and each zone is serving 33% of your traffic, suddenly the two that are left need to serve 50% each.
The bigger companies with overhead reservations will get all the instances before you can launch any on demand during an AZ failure.
For AWS specifically, I’m fairly certain they maintain a minimum distance and are much more strict on requirements to be on different grids etc than other Cloud providers. A few years ago they were calling out Azure and Google Cloud on exactly what you describe (having data centers essentially on the same street almost).
Each Availability Zone can be multiple data centers.At full scale, it can contain hundreds of thousands of servers. They are fully isolated partitions of the AWS global infrastructure. With its own powerful infrastructure, an Availability Zone is physically separated from any other zones. There is a distance of several kilometers, although all are within 100 km (60 miles of each other).
If you’re Amazon where every second is millions of $ in transactions you care more than StartUp that has 1 request per minute. Even if you accept the risk, you still care when your DC goes down.
Also, a large chunk of AWS is managed from a single data center so if that one goes down you may still have issues with your service in another data center.
Also, I think a lot, but not all of the services I use work okay with multiple regions.
On top of that, I was looking at the documentation for KMS keys yesterday, and a KMS key can be multiregion, but if you don't create it as multiregion from the start, you can't update the multiregion attribute. So you need to create a new KMS key and update everything to use the new multiregion key.