Not true. I‘ve been at several companies that self host Jira. With the amount of critical data and processes in Jira, it can be comforting to have it on-prem with no one else being able to access the server.
Are you sure they're not just "preparing for the migration" and plan to stay on premise? I also worked at many places that had it on premise - all of them planned to migrate ASAP (where asap is sometimes years).