they don't build it this way because cloud is cheap and slow. I have a UCS farm with 2000VMs, connected to 3PB of usable all-flash across 2 arrays, replicated active/active to another array, second-hopped to cloud. That's one site. About 100k users across 2 domains - 1k? I said enterprise. A SAN is not scalable but internal disk is? You need to look up what a SAN is.
The reason there is a standing joke with your coworkers is because you don't work on important things that run the world. When 1 minute of downtime costs you over $1mil, your "ripped off" Oracle costs, your SAN costs, etc, are lost in the rounding errors. I can have a SAN have hundreds of arrays, across multiple datacenters, and dynamically grow and shrink my storage needs. It is the definition of scalable. I can have one VM farm vmotion to another VM farm 30 miles away transparently, which will sit on a different array attached to the SAN. What happens when the storage needs of your server outgrow the drives you can shove in there? There are servers and databases a petabyte in size, pushing a million IOPS. They're in charge of money. If there is corruption on the SAN, well it infrequently happens, just like with servers and memory. Twice in my vast experience. You can roll back all writes on the replication software, and usually keep an undo journal a few days long, and something like hourly snapshots. This also protects against cryptoviruses and other types of corruption.
This is why people like you work at small companies, fiddling with your cute little projects, while the world moves forward with you on the sidelines. I've been doing this for 20+ years, and have been at most fortune100 companies, in 80 countries. But yeah, your opinion, while being dismissive, is cute.
The CIO is the guy in charge of getting this stuff at enterprises. It's clear you don't understand the impact of design. I am guessing you are not at an architect level. There's a reason for that, and a reason other people - the ones you put down in your post, are making the big decisions. People like you would cost the company millions of dollars in loss per year.