They are failing badly IMO. Most developers I know hate the whole experience of using AWS.
I can't complain much as I make good money by understanding their shit so others don't have to.
That said, I always find amazing how one of the largest companies in the world does not a have a UI with happy paths for simple common cases.
Most services are a hot mess of IAM, weird APIs, undocumented limitations and gotchas.
It doesn't have to be great, only better than the alternatives. I would argue most devs prefer the rocky experience of AWS to working with their own operations people on aging hardware.
Maybe the major cloud players believe they can buy up new & unhated competitors before they can establish a loyal user base. That strategy has worked pretty well so far for the vendors of mobile computing -- which just happens to be the primary consumer of low end cloud services.
So if mobile can be commodified some day (the way unix workstations were by Linux), maybe basic cloud services can be too?
That said, telcos used to mint money from overseas calls, SMS, ringtones etc, until the Internet came along and everything went "over the top" (over data and thus outside operator billing). They didn't take that lying down, either (IIRC Skype was still banned in the UAE until COVID finally whacked some sense into them), but in the end telcos were still reduced to dumb pipes they are today.