I agree that AWS offers much more than hosting, but when talking about hosting specifically the numbers are clearly better with 'bare metal' (rented or otherwise) -- it's just substantially more power per dollar. You'll need to do a cost-benefit for your own situation so YMMV of course, just as it would with any other provider or any other service your business may choose to subcontract.
If you're talking about actually running a global application then that would be a scenario where a network like Google's or Softlayer's does help by having 1 giant VLAN.
Any CDN can be stood up in front of a small fleet of dedicated hosts, and you'd still be saving 80%.
The bandwidth prices are high enough that I at one point mulled over setting up an "S3 compatible" storage service using S3 as the backend for durability, but storing a single local copy to most-of-the-time avoid hitting S3.
S3 bandwidth prices are high enough that there are huge cost savings to be had if objects are retrieved reasonably regularly.
AWS is more than just compute cores, and you're hand-waving away what it offers.