I am so glad I live in a world where I will never have to do this again for anything but large infrastructure projects. I've colocated servers at major POPs like 111 8th Avenue in Manhattan, Equinix in Seacaucus, One Wilshire in LA. For smaller projects, the convenience of the cloud is absolutely worth the price. For a larger build - like over 10k a month in infrastructure cost the cloud starts to make less sense eco…
So you don't need to monitor temperature sensors any more with a VM, but most of the above are still costs with cloud - flaky RAM, redundancy, backups, monitoring, etc. There are also the things you previously didn't have to worry about - crappy resource isolation turning your scratch disks into 2kb/sec joys, total ineffectiveness of the CPU cache, managing a now-essential network fabric to tie pieces of your app together where previously it all fit on 2 master/slave machines, etc.
Of course if your application isn't simply some stock PHP/MySQL application, and you want to really "embrace cloud", then the time you saved fighting a subset of hardware problems is replaced by a fixed development cost integrating with someone else's higher tier APIs (S3, Dynamo, etc) you can then never escape even if you wanted to.
I've never seen any realistic numbers comparing the use of traditional hosting facilities, say, providing managed servers, to the new generation VM stuff. Any material I've seen has been sponsored crap involving some multinational.
My own experience is similar to yours - hosting your own hardware is a pain in the ass. However there is middle ground, there are many colos that will happily provide managed hardware, and perf/pence, this still tends to be far cheaper than the equivalent in VMs, and increasingly they're coming with similar APIs to order/replace machines