It will ALWAYS be better to do it yourself.
If you spend time "doing it yourself," then you don't spend a lot of time and money on other parts of the business or the site. There is a scalability path that includes cloud computing.
If you have a large complex site like GitHub with an architecture that isn't conveniently accommodated by your cloud host and you can do it yourself, then it may be better.
Never say never and never say always.
These things add up.
Imagine comparing a $10/mo hosting account with a colocated server for $100/mo.
There are a plethora of scenarios that don't warrant owning or running your own hardware.
Unless you screwed up assembling the thing, the chances of something other than a drive failing are pretty small. I mean, not zero; don't count on hardware... I'm just saying, even if you have to get a $150/hr guy in to fix your bad hardware, that just doesn't happen very often. way less than once per server. Way less than once per every 10 servers (assuming you didn't screw up the assembly, and that you rotate out the server after 3 years.)
So yeah, there are many situations where it makes sense to rent, especially if you can't use 8 cores/ 32GiB ram of capacity. but if you use a whole server (32GiB ram/8 core; go virtual until you need that capacity, I say.) the cost advantages of owning hardware yourself are overwhelming. Sure, there are reasons to rent... I'm just saying, owning ends up costing you a /lot/ less money.
My solution is to run most stuff in a colo on dell boxes running the linux-vserver kernel patch, sort of a cheap mans cloud solution.