I have built what was underneath — and then threw it away, because the managed-services vendor built it better, and the OpEx of paying them to manage it was less than the OpEx of paying myself to maintain it.

It absolutely depends on scale. Smaller teams of better staff can sustain cloud infrastructure, especially if grabbing as many internal needs as possible so as to gather critical mass to make it pay for itself.

This has been the story repeated over the past 30 years

Not thirty years. 10-15. IT was a big industry that everyone did up until about 2010.

I’ve been involved in IT for over 25 years, I’ve seen a lot :)

By that logic I as AP dev should know systems programming and OS. A systems programmer should know kernel development ? A kernel developer should know assembly and microprocessor architecture?

Everybody has at best little or shaky knowledge of underlying abstraction. Yes it helps to know more, but is not really practical to expect that knowledge as the minimum required.

Yes you should have at least some knowledge of architectural principles and design of an api layer you directly depend on. How is that not just common sense?

Yes. You should know one layer of abstraction below the one you are using. Always. Because everything leaks, and eventually you have to fix it.

Every time someone mentions serverless some smartass feels obligated to mention that "there are servers". Yes we know. It's a specific technical term to refer to category of serverless products like AWS Lambda.