Then the problems of data management, transfer and egress are huge. Again the "no idea what we are doing" factor comes into play. If you have a really good idea up front what is going to happen you can plan out a strategy that minimises costs. But if you have no idea at all - genuinely, because this is science and we are doing new things - then you could end up blowing huge amounts of money on unnecessary egress and storage costs. And at the small end we can be talking about experiments run on a shoestring where a few thousand dollars is a big deal.
The way I see it, we need everything - powerful individual workstations / laptops for direct analysis, then a tier of fixed HPC style compute for this kind of work that is poorly matched to cloud, and then for specific projects where it makes sense (massive scaleout, exotic hardware needs - GPUs, FPGAs etc) you embrace cloud resources for that.