It also makes it easier to move servers, recycle hard drives etc - safe in the knowledge that the whole disk was encrypted - without worrying about where the used disk ends up.

The only real alternative is to manage your own servers in house and degauss/drill through old drives. And this might be more of a hassle (at scale) with ssds.

Consider a faulty disk that is replaced. It might be possible to recover data by using advanced techniques - but might not be possible to remotely wipe it. Now you have to hope your provider manages to safely dispose of the drive.

No, and I've set it up many times. It's just . . . whenever I talk to people about this I get the impression they think it secures them against more. Non-technical people especially (but not just them) worry about someone "hacking into the system". Full-disk encryption is almost more like physical security than digital security.

Every potential threat should be considered, but weighed against likelihood when prioritizing.

Sometimes you make cost/benefit consolations. 100% airtight would be great, but 100% airtight doesn't actually exist. Most organizations with finite resources have to make risk/reward decisions when there are as many threats as there are with web development.

The cost for encryption at rest is single digit percentages these days.

I push for encryption at rest on ANY cloud provider storage for one main reason: I have no control over their disk disposal or reuse mechanisms. They can claim they wipe the data, but I have no way to test that reliably.

As for disk encryption plus FS encryption, keep in mind in AWS or Azure, it's possible for a misconfigured IAM or SPN to leak access to the disk blob.. If it was encrypted with a key separately, the risk is mitigated. Again, it's just too easy to implement on almost every cloud provider thes days.