Having a cloud provider in your toolkit to handle traffic peaks, sure. That's very different from handling your base load with AWS, which a lot of people seem to end up doing.

Handling your base load with AWS is ludicrously expensive compared to the alternatives.

And the upside of having your system set up to be able to make use of a cloud provider with instance instance spinup in your toolkit is that it increases the cost gap:

Whereas if you go dedicated only, you need to be able to handle reasonable spikes on what you pay for on an ongoing basis, if you can spin up AWS or other cloud instances as needed, you can push your dedicated boxes far closer to max utilization than what you otherwise would.