I agree.
>They may make more sense in dedicated servers vs. coloing your own hardware, though.
depends on what skills you have already, and then your time to money exchange rate. If you use a lot of compute power, you can save a lot of money with a relatively small time investment, if you already have the skills.
Of course, this does eat the same amount of labor as building for the cloud /and/ building for co-lo, so you still have the time cost.
One project moved from AWS to a managed hosting provider with gear built to our specs mostly due to IO issues... continued to grow and then went back to AWS looking to do an easy DR process. Had some issues just with EC2 being able to keep up with replication at that point.
The one thing I'd like to try with AWS though is their Direct Connect service. Basically colo in a facility near them and get a cross connect to EC2 (think it focuses on VPC). http://aws.amazon.com/directconnect/
IO loads on real hardware, EC2 for all the other stuff.
But yeah. Active/active is a far better solution than what I describe, I mean, modulo the extra cash it costs.
[1]well, really, it's sharing spinning disk... the actual overhead of virtualization is pretty low by this point, but if you have two people accessing the same spinning disk? each gets rather less than half the performance they'd have gotten if they have the whole disk to themselves due to the physics of spinning disk and how much worse random access is than sequential. (two simultaneous sequential read/write streams to the same disk can look a lot like random access, depending on queueing.)