Neither of your anecdotes match my own personal experiences - so I'm sure the general truth is somewhere in between.
I've been responsible for millions of dollars of AWS spend over the last decade. I've had virtually zero AWS caused downtime in that period outside of the few major outages that affected the whole world (for example that major S3 outage) - but the "100s of services will always have performance issues or degraded availability" has literally never been true for me. I've had hundreds of instances be retired - but that is all automated and without downtime.
Over the last 18 months at my current company, we've had 100% uptime - there has not been a single AWS incident that has affected us in us-east-2. And since we're using ECS and fargate, we've also not had to worry about instance retirement.
On the other hand - I've also had numerous personal servers with hetzner over the years - and the hardware is _old_. I've had at least 3 hard drives go bad over the last ~8 years.
Again, I still strongly recommend hetzner for many cases - but I just think it's important to go in understanding the difference in responsibility for things like hardware level monitoring.