There's actually an element that's way overlooked: peace of mind. Let's say AWS goes down. 1) You can't do anything about it, so while you're upset, you're not losing sleep driving to your colo and back at 3am. 2) Many, many other companies - some of whom are infinitely larger than you - are also down. No one is going to mock you in TechCrunch for being down. They're going to mock Amazon, Rackspace, or whomever.