If you're just running VPS on the big clouds, you're not going to get much advantage out of it, indeed.

But tell me what third tier cheap provider has managed scale-to-zero-or-infinity functions? Managed storage with S3-like API? Where can I get an API gateway cheaper than Amazon? What about managed databases? These tools allow me to develop insanely scalable software incredibly easily.

Agreed - all the big clouds are very expensive VPS hostings. Don't use it for that.