They're selling all their capabilities; using them as a VPS is like using a battleship to cut cheese.
But if all you really do with cloud stuff is "ssh into a server I have" (which covers a ton!) then you'll find much cheaper/more performant elsewhere.
You have never seen a small business then. A local shop is not spending $10k to host their website. Lots of VPS hosts have products aimed at this market so it must he significant in aggregate.
My point is small businesses tend to be owner managed and therefore more cost sensitive and the costs are still not a significant factor. AS businesses get bigger its even less significant and its other people's money.
> They're selling all their capabilities; using them as a VPS is like using a battleship to cut cheese.
A lot of people do it.
People feel the battleship is safe and familiar. For most businesses the extra cost is not even noticed. Even a small business spending $500/month on hosting instead of $50 is not going to notice.
Also, if something goes wrong (e.g. your AWS region goes down) its far easier to explain to a manager or client that "its Amazon's fault and lots of stuff is down", rather than "its Digital Ocean's fault".