Sure, I'll use a $5/mo DO Droplet (maybe $6/mo now for the new ones?) and their 1TB transfer pool if I just need raw bandwidth, but, tbh, not a lot of stuff is just pure bandwidth needs. And "capable cloud boxes for various purposes" start adding up. If I just wanted to shovel out a static website, sure. But I can do that a variety of other ways too.
Once you start running "real" things, CPU and RAM use start climbing - mostly RAM in my experience. I run a Matrix homeserver - Synapse really struggle with <4GB RAM on the system, so it's one of a few things on a VM with 16GB. I've got a Minecraft and Valheim server running for friends and family - 8-12GB is reasonable for both. You certainly can do it in less, and I've done it, but a lot of problems go away when you can just throw RAM at the problem.
Also, most of the cheap VPS boxes are badly IOPS limited on disk - unless you start paying a good bit more for faster disk. I split my box between a 2TB NVMe mirror for VM root drives and "high write traffic" stuff (the gameserver drives and the like), and my large, slow, spinning rust array for backup storage and "big stuff." Again, you can do it with cloud, but storage adds up in a hurry - 24TB of "slow" disk is a grand a month.
It just depends on what you need. I really like cloud boxes for light use "toy" boxes, and if that's what you want, they're great. I just cannot wrap my head around the merits of spending a lot of money for "serious cloud compute" when I can build and rack a similarly capable box for 2-3 months of the cloud spend on a similar system. I understand opex vs capex issues for business, but, man, it sure seems stupid to me.
Then again, I'm the kind of person who's had a box racked up a colo (or somewhere similar - random basements on a good connection are nice) for the majority of my adult life. So I'm pretty clearly biased. But I did do a few years of "Hey, cloud, this is cool" - and eventually sat down, evaluated my needs and the costs, and went back to a colo'd box.