> You can get off the shelf AWS units with 1000 cores, terabytes of ram and storage, etc.
Hold your horses... the beefiest servers that are in production today, unless you count custom-made stuff go to somewhere between 128 and 256 cores per board. These are hugely expensive. Also, I don't know if you can rent those from Amazon.
Typical, affordable servers range between 4..16 cores. Doesn't matter if you buy them yourself, or you rent them from Amazon. It's much cheaper to command a fleet of affordable servers than to deal with a high-end few. This is both because the one-time price of buying is quite different and because with smaller individual servers you have a fighting chance to scale your application with demand. Especially this is true in case of Amazon as you could theoretically buy spot instances and by so doing you'd share the (financial) load with other Amazon's customers.
Now... storage. Well, you see, in Amazon you can get very expensive storage that's guaranteed to be "directly" attached to the CPU you rent, the so-called ephemeral storage. This is the storage that's included with the VM image you use. It's very hard to get a lot of it. I couldn't find the numbers for Amazon, instead, I know that Azure tops out at 2 TB. In principle, this kind of storage cannot exceed a single disk, so, think Amazon probably offers the same 2 TB, maybe 4. But, again, it's cheaper to have a bunch of EBS's attached... but then you'll have to have more of them as the latency will suffer, and in order to compensate for that you would try to increase throughput, perhaps.
Also, think that, in practice, you'd want to have a RAID, probably RAID5, and this means you need upwards from 3 disks. Also, if you are using something like a relational database, you'd most likely want to put the OS on a single device, the database data on a RAID and database journal on a yet another device, and, probably, you'd want that device to be something like persistent memory / optane / something from higher-tier disks with dedicated power supply. And all this is not due to size, but due to different contingencies you need to have in order to prevent huge data loss... Now, add to this backups and snapshots, perhaps replication in 2-3 different geographical areas if you are running an international business... and that's quite a bill to foot.
There are similar problems with memory, since there can only be so many legs on memory bus and only so many pieces of memory you can attach to a single CPU, and if you also want a lot of storage, then, similarly, there can be only so many individual storage devices attached and so on.
Bottom line... even to reproduce the performance of your laptop in the cloud you would probably end up with some distributed solution, and you would still struggle with latency.