On some level, AWS/GCP/California relies on you doing this calculation for the things that you can do it on easily (the savings of moving away), while not doing this calculation on things where it's hard to do (new development). That way, you can pretend that your new features are a lot more valuable than the $Xk/year you will save by moving your infra.
Yes, I've done the math. The piece you are missing is, saving money on infra will bring in $0 new dollars. There is a floor to how much money I can save. There is no ceiling to how much money the right feature can bring in. Penny pinching on infra, especially when the amount of money is saved is less than the cost of an engineer is almost always a waste of time while you are growing a company. If you are at the point where you are wasting 1x,2x,3x of an engineers salary of superflous infrastructure - then congratulations you have survived the great filter for 99% of startups.
>That way, you can pretend that your new features are a lot more valuable than the $Xk/year you will save by moving your infra.
Finding product market fit is 1000x harder than moving from RDS to On-prem. If you haven't solved PMF, then no amount of $Xk/year in savings will save you from having to shut down your company.
The thing is, most features, particularly later in the life of a company, don't have an easy-to-measure revenue impact, and I suspect that many features are actually worth $0 of revenue. However, they cost money to implement (both in engineering time and infra), making them very much net negative value propositions. This is why Facebook and Google can cut tons of staff and lose nothing off their revenue number.
Also, there's a bit of a gambling mentality here which is that a feature could be worth effectively infinite revenue (ie it could be the thing that gives you PMF), so it's always worth doing over things with known, bounded impact on your bottom line. However, improving your efficiency gives you more cracks at finding good features before you run out of money.
These questions always sound flawed to me. It's like asking won't I regret moving to California and paying high taxes once I start making millions of dollars? Maybe? But that's an amazing problem to have and one that I may be much better equipped to solve.
If you are small, RDS is much cheaper, and many company killing events, such as not testing your backups are solved. If you are big and you can afford a 60K/yr RDS bill than you can make changes to move on-prem. Or you can open up excel and do the math if your margins are meaningfully affected by moving on-prem.