Recently I bought an old SuperMicro server on eBay, configured it with 2 6-way AMD Opterons, 3 8-way SATA controllers, and 32GB of memory. With 4TB 5700RPM drives in an 8-way software RAID6, it could do 800MB/sec. I realize it's not small file random I/O, but a blended configuration where you put small files on SSD and large files on spinning disk would probably be pretty sweet.
My intuition is that learning all the ins-and-outs of AWS, and how to react and handle all kinds of situations, is not that much easier than learning how to react with your own hardware when problems come up. Especially consider that AWS is constantly changing things and it's out of your control, whereas with your own hardware, you get to decide when things change.
If you can colocate physically close, it's a lot easier. Our colocation was in Fremont but our office was in San Fran, so it was a haul if we had to install or upgrade equipment. But even so, there was only 1 or 2 times in 7 years that we needed to spend 2 consecutive days at the colo. One of those was during a major upgrade where it turned out that the (cheap) hardware we bought was faulty.
When you run your own hardware you have all the engineering you were already doing plus investing to upkeep and to improve your architecture.
As Google's boulos said, that's where the real costs are.
In an earlier comment you said EBS only goes to 16TB and that is "an order of magnitude less" than your requirement, however, thats per volume, you can attach many volumes in much the same way as servers have many disks.
Scale horizontally not vertically, add more OSD instances? With each you can attach a number of EBS or PD volumes which each IOPS characteristics that in aggregate are sufficient to service your workload?
If you want to avoid EBS or PD entirely, is there a reason you can't look at 'i2' or 'd2' instance types?
https://cloud.google.com/compute/docs/disks/performance https://aws.amazon.com/ebs/details/#VolumeTypes
At a fundamental level you're just moving the problem and trading managing metal (which is hard) for I/O guarantees.
"Why is this harder than you might expect?" - you stated elsewhere that you'll have Remote Hands do rack/stack. Providers like Equinix refer to this as "Smart Hands". Everyone who's managed a reasonable-sized environment finds this term highly ironic, as the technician can and will replace the wrong drive, pull the wrong cable, etc.
I've done an non-trivial amount of infrastructure 'stuff' (design, procurement, install, maintenance, migration) for some well-known companies, if you want to Hangout for an hour and pick my brain, gratis, my e-mail is in my profile.