[chimeracoder]

> At AWS, you're paying for it to be in your same account, have access to your other AWS resources, etc.

You're forgetting the biggest part: you're also paying for the flexibility. Subject to availability, you can provision and deprovision AWS resources at will, which gives you far greater granularity than you can do with your own hardware.

This flexibility enables you to save in the long run if you manager your resources appropriately, but it also comes at a per-unit premium.

[toomuchtodo]

Very much this. If you're starting out or have a very dynamic load pattern (Netflix), AWS is for you. If you have a fixed load pattern, you can see quite a bit savings going to dedicated hardware (Stackoverflow/Stackexchange).