I don't really agree with you unless you work for a very large company that has an economy of scale.

Think you can compete with AppEngine for cost per computation/bandwidth/storage? Developing for AppEngine is a bit restrictive, and Amazon provides much more flexibility for not too much more money for computation/bandwidth/storage.

Also, Amazon associated services like S3 and SimpleDB really are inexpensive for what you get.

I used to base my consulting business on deploying customer aps to VPSs or cheap servers. I think that Amazon and Google AppEngine are the future.