Netflix runs a CDN for the video nodes, but runs on AWS for everything else (eg login microservices). The CDN, which includes hardware deployed inside of ISP), represents a huge capital outlay (over decades) and is a competitive advantage for delivering large amounts of data around the world.

They own their own CDN for content, they don't own their own general web hosting (they famously use AWS).

Surely the CDN for that huge streaming library is the expensive part of their infra.

https://openconnect.netflix.com/en/

Which means its hosting infrastructure is not even as cost-efficient as it could be.

For their use-case it's probably as cost effective as it needs to be. Bring all that cloud hosted infrastructure in house and then you've a whole new set of costs to deal with that aren't present in their current arrangement.