CPU is a limiting factor for a lot of applications. And EC2's offerings are paltry until you get into the really expensive VMs. But it's not just CPU, it's the overall performance. Engineers want to run on hardware for many more reasons than CPU. And for most apps it's the rational choice. After all, you can build your own data center for the price you pay to rent some virtual machines.

tl;dr: With cloud services you pay thousands a month for _renting software_.