I don't understand why people are that surprised though. Everything still runs on hardware, just not stuff that you own, and you now have no ability to get anything working in the case it gets borked. You just have to wait (a lot of time with very little information as to what caused it to break and when it will be fixed).
Yes there are benefits to using somebody else's kit but you need to understand the pitfalls with this approach as well. If your company is happy to sign on the dotted line fully understanding this then go for it. I suspect that most have been lulled into a false sense of security by salesmen though, didn't listen to the in house IT (well why did we pay a consultant all that money if not to ignore everyone else) and spent a load of money on 'the cloud' as that's what everyone else is doing!
So now we are in a situation where you have ditched all your local hardware and are entirely reliant on 'cloud' offerings. But that doesn't remove the need to have redundancy in your service providers as well. Netflix are a great example of planning and doing it right. But most companies don't do it to this level and so when it goes wrong it goes horribly wrong. There must be a point though when the cost model swings back the other way, even more for those who have been burnt already, and companies start setting up their own hardware estates again.