Note the collorary: with a sufficient business model you can earn arbitrarily large amounts of money relative to hardware costs.

Which always makes me wonder why the clooooooooooooud gets so much press for cost reduction. If your application doesn't value data by weight (or worse, values data at 0), your hosting costs are going to be rounding error. Reducing the rounding error to half-sized doesn't strike me as the number one best use of time for the majority of businesses.

Elastic scalability is a major advantages in some cases, allowing you to rapidly scale up (and back down) while minimizing waste. "The cloud" absorbs the fluctuations.

Easy deployment and thus reduced administrative costs might be another. With EC2, etc that's might not be the case, since you still have to set up the OS images and other infrastructure yourself, but things like Heroku might help.