What leads you to believe that paying a premium to someone else to use their computers is a solution that fits each and every single case?
Even AWS is clear in how their present their offering as something that allows projects to grow and scale quickly while avoiding upfront costs buying and hosting their own hardware.
Ease of scale? Ease of development cost? Or other marketing material?
AWS's shared responsibility model is quite clear in stating that end users are ultimately the ones responsible for security and compliance. So your points are moot.
"Flexibility" in this case is so vague that it's meaningless. I mean, is there anything more flexible than owning the entire infrastructure and software stack you chose all by yourself?
I feel that your comment is a red herring. Using someone else's computer does not mean taking advantage of computing power alone, and nothing more. In fact, the point of paying someone else to use their system was never computing power, specially nowadays.