The odds of the emails going through AWS, GCE, or Azure infrastructure in one form or another is probably pretty damn high even if you host your own SMTP service.
Sure, then you can use whatever SMTP option that is best for you. Some people are fine with using American cloud providers and some are not. If they are technical enough to host their own email server, they are more than likely to understand what choices they are making.
If you run your own incoming mail, nobody but you has a copy of your entire mail archive and you are self-hosting that data. It can't be handed over to the government, it can't be sold, it can't be analyzed by gmail, etc. That's where the big win is. If you send e-mail using SES, that's one untrusted hop out in front of an unknown number of untrusted hops that you can't opt into or out of - there's little practical difference. The privacy win come from hosting your own data, not your own smtp server with a carefully curated reputation that you spend hundreds of hours a year working on.
That is _your_ definition of self-hosting. Do you rely on an entity for your internet connection? At some point, you _will_ need to rely on someone else's infrastructure.