I don't disagree that a consumer board is about that price, but they're not apples to apples. (Either in memory size, reliability or both). I'm fine with that being the real complaint: (major) cloud providers only sell the Tesla class boards, and they're really expensive ;).
It would be nice to see Nvidia or someone expand on this, so that users who have to make this choice can do so without guessing. If Google or AWS or M$ could publish reliability information, that'd be cool too.
Illustrative case: I run Monte Carlo work on GPUs and administer a local compute cluster. I tested a workload on a 16 GB P100 and a GTX 1080. A 12 GB P100 costs (academic, EU) 5000 euros while the latter costs 700 euros, but the performance difference is about 2x. Still, when we ask Nvidia reps, they say not to bother installing GTX cards in our cluster, because they aren't designed for 24/7 work, not commercializable etc. Even so, the GTX would have to burn out 3 times before the choice of P100 breaks even. Burning out three times means GTX 1080, then 1180, 1280 etc.
The real attractiveness for cloud at this point is if you are going to train your model with 8-GPU or more, that is likely not feasible for individual enthusiasts, but demand for such machine is rare for hobbyists anyway.
https://arxiv.org/pdf/1704.01444.pdf
They say they used four Titan X cards for a month. I was actually looking at google cloud machine learning since I thought being targeted to tensorflow would be the most cost effective. But it's 0.49/hour per ML training unit, or 1.47/hour per GPU. A basic gpu gives 3 training units, so I thought that something approximately similar would require 12 training units, which comes to something like $4000+ a month. Maybe I completely misunderstood the resources being offered though, because you are right that cloud engine costs seem much lower.
I'll have to revisit the math here, though it worries me that it's not at all clear that a K80 will be much faster than a Titan X for a given problem. E.g. https://www.amax.com/blog/?p=907. It would also be really nice to get some pricing and benchmarks for the new TPUs, assuming they are priced better.
Maybe part of the problem is that vendors are not making it remotely easy to even understand what performance you'll actually get for a given price.
Payback time according to my own calculations depending on GPU model and machine used compared to the various cloud offerings is between 4 and 6 months when used continuously.
There are also other hidden costs that aren't factored into that number. I'm having a hard time getting anything reasonable for under $750/month for 24/7 usage: https://cloud.google.com/products/calculator