The problem is that half the servers failing is indistinguishable from a switch connecting two racks being flaky, or anything else which can lead to half the servers being temporarily disconnected from the others.
Classical consensus only solves the problem for up to 33% failure (3f+1 nodes, with f failures), having half of your servers fail can not be done with paxos.
Why would I buy two switches when I can solve the problem in general with a consensus algorithm that handles hosts going away for any reason?
Especially since a flaky switch isn't the only issue. Power loss could bring down even redundant backbone switches, but leave communication within the rack going. You could accidentally push a bad routing config and blackhole traffic to a bunch of hosts. You could send out a bad push that intermittently breaks connectivity to some hosts. And so on.