The price differential between buying the hw/sw & staffing a professional (or team of professionals) to curate and maintain it 24/7/365, or simply off-loading it all to an outside party, could be huge -- I'd dare say huge enough to make or break a company. From an executive POV, why care about data safety, when hosting it yourself makes your business model non-viable?
I realize there are lots of problems with this line of thinking, and I'm not advocating it at all, but I'm willing to bet this has been the case for some.
Building a government you can trust will take several generations, with each generation providing hundreds of thousands ENTIRE LIVES to the cause. It might be efficient in the grand scheme of things, but from an individual or even corporative point of view, it's terribly inefficient in any timeframe you might consider.
They use custom Apple/Mac software for all their POS equipment. You know how many people run an IT department that is charge of that much equipment, people, inventory and software?
TWO.
Scale that up to five thousand seats. Five thousand seats is big? Not really.
Every day a piece of hardware dies. Every month someone rolls out a new software package. There are many different user profiles, accounting, sales, warehouse, IT, marketing, executive. Then there's that one guy that needs that program that only runs on XP SP1....
Every IT department has to justify its cost per user. Once you get above 1K seats, a lot of things that seem like overkill start to make sense really quickly.
All Amazon is offering is a managed version of what larger companies have been doing internally for years. Just like their server business, it seems expensive until you actually work out how much it would cost to do it yourself.
Because they offer better security than I can build in to my own home (at least not without significant effort) and they offer guarantees should my money go missing under many (but not all) circumstances (for example, the savings guarantee if a UK bank goes bust).
Do cloud providers offer the same? The guarantees may vary dependent upon service contracts (uptime, backups etc), but the idea that their data-centre was better secured than my company server-room was supposedly a given (at least for most small to medium organisations).
EDIT: added qualification to last sentence
The insurance is just an incentive to keep my stuff safe (and in the case of savings guarantees, an incentive to keep consumer-facing banks from going bust).
If you have a secret, why would you even store on the Internet? If you are worrying about conversations with your friends, that kind of privacy, don't log it. If you can't trust Google/Skype, you have to find your own solution.
For me, I got a lot of cat photos and I don't know what NSA could do with my cat photos.