You're just missing the whole point of why you need n>1 instances. You're focusing on what might be the least compelling reason for the majority of applications, which is scalability.
Reliability and fault tolerance is a major selling point, and you can't simply expect to have adequate performance in more than one region if you're providing your services out of a single box in a single data center. The laws of physics ensure your quality of service will suck.
Operations also compell you to have multiple instances, ranging from blue/green deployments to one-box deployment strategies. And are you going to allow your business to be down for significant amounts of time whenever you need to update your OS? How would you explain all that downtime to your boss/shareholders? Are the tens of dollars you save on infrastructure a good tradeoff?
Also, security is also a concern. You're better off isolating your backend from frontend services, and software-defined networks aren't a silver bullet.
And in the end, are the tradeoffs of not designing your web services the right way really worth it?