You're not entirely wrong, but you're being hyperbolic too. I'm actually curious how old you are / how long you've worked in tech, because I started out pre-cloud and things weren't nearly as bad or as limited as you suggest.
First, on-prem servers are not the only alternative to "cloud." Many businesses, including the ones I worked for, did co-location. The companies owned their own bare metal servers, but would rent a rack in a data centre, and certain things - like the network admin - was entirely outsourced to the data centre / hosting company.
You could also rent managed bare metal servers (you still can). This means that you can pretty much outsource your entire IT department, but you're still not doing cloud services. Meaning you've got bare metal servers, someone you're paying at the hosting company is handling security updates and troubleshooting. You don't get things like auto-scaling or serverless or other cloud features, but you also don't have to worry about Jim tripping over the power cable either.
There's also still virtual servers. Which is basically a VM running on a server that hosts multiple clients.
All of this is to say that the alternative is not "cloud" or "box in a closet." The alternative is "cloud" and a ton of different server options: owned, rented, co-located, on-prem, dedicated, virtual, managed v un-managed (outsource IT vs admin your own) and the list goes on and on.
100% of our failure rates with this machine have been "carpet cleaners unplugged the machine" in 2 years. Last year we had nobody in the office (due to carpet cleaning). This year we sent someone in straight after the cleaning to fix it.
Not saying as an industry we shouldn't diversify a little but it doesn't fundamentally change the relationship each company has to their hosting provider.
When that company went under during the dot-com crash, I started my first business shortly after. It was 2003, I was 21 years-old and this business allowed me to work from home and feed my family until I re-entered the job market in 2018. For 15 years, I was a one-person organization, and because my business operated "free" adult-entertainment websites, bandwidth was my most significant expense. For that reason, even when Cloud became a thing (which it wasn't in 2003), I never migrated because of the bandwidth costs alone. Cloudflare was a major game changer but even it didn't exist when I first started out. There were CDNs like Akamai but they were crazy expensive and out of my league. So at its peak, I had about 12 bare metal servers around the world (all rented from the same hosting company - original called Server Matrix it then became Softlayer and then was bought by IBM and went to shit and is now IBM Cloud). I admin'd those on top of writing and maintaining all of the code and running the business independently with occasional help from my wife.
I am obviously very technically competent. I'm a Principal Software Engineer today. But technically sophisticated? There wasn't much sophistication about it. I did bare metal servers because it was the only cost-effective way to run my business. It was attainable and it worked. And it worked in a way that Cloud couldn't when Cloud came on the scene - so I never went Cloud with that operation just due to cost alone.
But apparently that’s too hard for the average.
In a surprise to literally no one that happening on the last friday before xmas break got my "We need to secure the main comms cabinet" (which had the backup server and main ingress for WAN and was in a separate building on other side of site) item that I'd been asking about for months to the top of the list.
Still one of my favourite "outages" because I got to my desk, turned PC on, no network, walked across the landing into the main office, opened comms cabinet, plugged it back in and was "resolved" before the MD got to my desk.