> and the downside is that when they do it might affect all clients, not just one.

This is also potentially an upside. For example when us-east-1 went down recently, customers were somewhat understanding because it was "amazon's fault" and everyone was down - it was in the news, etc. If we ran our own data center and that went down, our customers would've just said "why did you morons roll your own data center instead of just using aws?"