Well cloud providers often give more than just VMs in a data enter somewhere. You may not be able to find good equivalents if you aren’t using the cloud. Some third-party products are also only available on clouds. How much of a difference those things make will depend on what you’re trying to do.

I think there are accounting reasons for companies to prefer paying opex to run things on the cloud instead of more capex-intensive self-hosting, but I don’t understand the dynamics well.

It’s certainly the case that clouds tend to be more expensive than self-hosting, even when taking account of the discounts that moderately sized customers can get, and some of the promises around elastic scaling don’t really apply when you are bigger.

To some of your other points: the main customers of companies like AWS are businesses. Businesses generally don’t care about the centralisation of the internet. Businesses are capable of reading the contracts they are signing and not signing them if privacy (or, typically more relevant to businesses, their IP) cannot be sufficiently protected. It’s not really clear to me that using a cloud is going to be less secure than doing things on-prem.