Of course, but building and managing the software stack, managing hundreds of spares across locations, spanning across datacenters, having a hotswap backup system is not a simple engineering endeavor.
The only way to reach this point is to invest a very large amount of time into it. It requires additional headcount or to put other work on pause.
I was trying to address the type of buildout in this article: Small team, single datacenter, gets the job done but comes with tradeoffs.
The other type of self buildout that you describe is ideal when you have a larger team and extra funds to allocate to putting it all together, managing it, and staffing it. However, once you do that it's not fair to exclude the cost of R&D and the ongoing headcount needs.
It's tempting to sweep it under the rug and call it part of the overall engineering R&D budget, but there is no question a large cost associated with what you described as opposed to spinning up an AWS or Cloudflare account and having access to your battle-tested storage system a few minutes later.
I don't have this experience at all. Our colo handled almost all work. the only time i ever went to the server farm was to build out whole new racks. Even replacing servers the colo handled for us at good cost.
Our reliability came from software not hardware, though of course we had hundreds of spares sitting by, the defense in depth (multiple datacenters, each datacenter having 2 'brains' which could hotswap, each client multiply backed up on 3-4 machines)...
servers going down were fairly common place, servers dying were commonplace. i think once we had a whole rack outage when the switch died, and we flipped it to the backup.
Yes these things can be done and a lot cheaper than paying AWS.