Not my company, but I work with another company that does (nearly?) all of their infrastructure on premise. They have pretty great uptime, in a large part because they're not dependent on the 3-4 global state mechanisms that consistently cause outages with cloud providers (DNS, BGP, AWS's role management/control plane, &c.).

I think you're right about what we over- & under-estimate, but that we also under-estimate the inflection point for when it makes sense to begin relying on major cloud services. Put another way: we over-estimate our requirements, causing us to pessimistically reach for services that have problems that we'd otherwise never have.