Prior to AWS, I was in IT Operations at a large financial services company. I saw the writing on the wall that over time, companies would not want to manage this part of their IT infrastructure themselves. Keep in mind, I was someone who was responsible for keeping the lights on for a decent number of Linux severs.
For an individual company, there really isn't much value in having to maintain firmware levels on all your hardware, patch hypervisors (and try to coordinate all of the maintenance around a fixed pool of hardware), perform months-long evaluation of new hardware before purchasing, test and validate configurations on new hardware, etc. I used to do all of this. I don't miss it either.
Yes, the items above are important, but doing them right is really table-stakes for any reliable IT Operations department. You can choose to spend time getting these right, or delegate that responsibility to a service provider whose main job is to get that stuff right (and recoups that cost across a much larger customer base).