[riotingpscifis]

If you setup you're stack wrong then some of you're points are valid. But many amazon services offer you redundant infrastructure at a reasonable cost.

But the key advantage over traditional hosted solution is that you can run reproducible test and dev stacks for 8/12 hours a day without having to pay for hardware that sits there doing nothing while you sleep. Sure cloud computing has it's faults but the ability to run you a HA test stack in 3/4 datacenters in minutes, and pay for just the time you are testing it, enables people to move forward and develop more and more impressive technology.

OTOH I'm not sure why you would run cloud on your own hardware as you're already paying for the HW, I suppose it simplifies the management significantly for PayPal or they wouldn't be doing it