Lets ignore the loaded, cherry picked situation of no redundancy, no spares, and no warranty service. Because this is all magically hard since cloud providers appeared even though many of us did this, and have done this for years....
There is nothing stopping an on-prem user from renting a replacement from a cloud provider while waiting for hardware to show up. That's a good logical use case for the cloud we can all agree upon.
Next, your cost comparison isn't very accurate. One is isolated dedicated hardware, the other is shared. Junk fees such as egress, IPs, charges for access metal instances, IOPS provisioning for a database, etc will infest the AWS side. The performance of SAN vs local SSD is night and day for a database.
Finally, I can acquire that level of performance hardware much cheaper if I wanted to, order of magnitude is plausible and depends more on where it's located, colo costs, etc.
But let's not just make vague claims. Everybody keeps saying AWS is more expensive, right? So let's look at one random example: the cost of a server in AWS vs buying your own server in a colo.
So, yes, the AWS server is double the cost (not an order of magnitude) of a ServerMicro (& this varies depending on configuration). But with colocation fees, remote hands fees, faster internet speeds, taxes, shipping, and all the rest of the nickle-and-diming, the cost of a single server in a colo is almost the same as AWS. Switch to a full rack, buy the networking gear, remote hands gear, APCs, etc that you'll probably want, and it's way, way more expensive to colo. In this one example.Obviously, it all depends on a huge number of factors. Which is why it's better not to just take the copious number of "we do on-prem and everything is easy and cheap" stories at face value. Instead one should do a TCO analysis based on business risk, computing requirements, and the non-monetary costs of running your own micro-datacenter.