As I pointed out upthread, low frequency is not the same as low probability.
It might not make sense to upfront allocate resources for a low probability event, but it certainly could make sense for a high probability event even if it was low frequency ... like a spare bedroom, or a dining room, or a car with good range.
The probability of using those things are 1 i.e. guaranteed.
My spare bedroom has a futon couch but I actually use the space for various other things most of the time. Most people may have space that’s underutilized much of the time but that doesn’t mean it’s sealed off until they have an overnight guest or a large dinner part. Things aren’t that binary.
When provisioning servers, do you average your throughput and get enough capacity for that average?
Of course not, that would be assinine. You need to be able to serve 24 hours a day, even - especially - during your edge cases. Follow your advice and explain to the CEO that since Black Friday is a "low frequency event," it's fine that your site was down during that one day.
A better argument is that you should choose things, including houses and cars, based on edge cases since that is where meaningful differentiation occurs. If I take one road trip each quarter and my car is unable to handle it, then I bought the wrong car.
My point is that there is a cognitive bias towards overweighting the allocation of resources toward low-frequency events.