The cloud is indeed real - but not necessarily better. There are real risks associated with it, not just FUD. Outsourcing every aspect of your business can potentially increase your focus on your "core competencies", but you run the very real risk of having a provider close their doors, forcing you to re-evaluate at a moments notice. The "cloud" isn't some magical thing where hardware failures don't happen, it's a real infrastructure managed by someone else. When you hide everything behind the term "cloud" (as in: But we don't have to evaluate their architecture - it's in the cloud!), you risk relying a little too much on someone else's ability to manage a datacenter/network/infrastructure.

Sometimes this is a good decision, sometimes this is not. IT people hate the lack of clarity, because when something fails and they can't explain why or what they did to prevent it (nothing! it's the cloud!), it's their ass. And that's a very real risk.