The question should be the other way around. Dedicated servers are not cheap per-se, they're just being sold at the market price.

The question should be, why is AWS so expensive on all fronts (not just the hardware but also bandwidth)? And the answer is again because the market lets them get away with it.

AWS is so profitable it turned Amazon from a marginal business into a tech giant. As for Google and Microsoft they don't get out of bed in the morning for anything less than a billion dollar opportunity.

A large part of the cost of a VM on these clouds is paying their super high employee comp, for advanced software development e.g. CosmosDB/DynamoDB, but most of all, contributing to the high revenue growth that drives stock prices.

It's not paying for the actual cost of hardware. Smart people know this and don't run in the cloud unless they get a sweetheart deal. Consider that GitHub, for example, runs/ran in their own datacenter and used the cloud only for spillover capacity. Zoom also (although now Oracle cut them a sweetheart deal). Netflix built their own CDN etc.

You pay them monthly instead of hourly, also you have to manage them yourself.

How to manage a bare metal server running CentOS automatically:

Add this cron job:

yum -y update

It's not quite that easy, is it.

At minimum you need a data replication and backup strategy. You're exposed to things like drive and RAM failures on dedicated hosts, so you'd need to think about RAID at least, unless you're running a system that clusters at a higher level (but then you need multiple machines).

However this is basically a matter of learning or hiring/renting a sysadmin to do it for you.

MTBF stats for different classes of hardware at different hosts would be valuable to have, as it can be affected by things like datacenter temperature. But I never heard of such a dataset.