On prem rarely makes sense any more other than at that kind of huge scale or for privacy, sure. But that's because dedicated hosting operates on really thin margins and has become really cheap. You have to get to massive scale before cloud providers will give you big enough discount to start approaching the kind of costs you can get that way with a decently engineered system. Not least because cloud providers themselves provides a weapon: Set up your system so it can scale up using a cloud provider to handle traffic spikes and you can load those dedicated servers much more heavily than you could otherwise risk.
The biggest issue, though, is how few people are aware they can negotiate with their cloud provider. I've seen so many places just pay the sticker price without even trying to get discounts.
(Conversely, I once got a contract to do zero-downtime migrations first from AWS to Google Cloud and then to Hetzner so a startup could launch on AWS and spend the huge amount of free credits they'd been given there, then migrate to Google Cloud to do the same, and then finally move to Hetzner once they had to actually start paying; relative to what they'd have to start paying if they'd stayed on either AWS or Google after their credits ran out the cost of having me do the extra setup to handle that was covered with ~2-3 months of their savings)
The biggest issue, though, is how few people are aware they can negotiate with their cloud provider. I've seen so many places just pay the sticker price without even trying to get discounts.
(Conversely, I once got a contract to do zero-downtime migrations first from AWS to Google Cloud and then to Hetzner so a startup could launch on AWS and spend the huge amount of free credits they'd been given there, then migrate to Google Cloud to do the same, and then finally move to Hetzner once they had to actually start paying; relative to what they'd have to start paying if they'd stayed on either AWS or Google after their credits ran out the cost of having me do the extra setup to handle that was covered with ~2-3 months of their savings)