"There are also many more deployment options when you are targeting clouds than your own data center.
With the exception of very specific privacy and security issues - which can arguably be addressed anyway - there are fewer and fewer reasons why any organization would want or need to run their own massive server farm."
I would argue that any company that had a serious ongoing need for HPC would rather target a cloud *in* their own data centre. Privacy and security issues cannot just be glossed over with "can arguably be addressed" at all. There are plenty of organisations out there that would potentially use HPC - let's take financial institutions for example - that cannot just squirt data around the globe to old-mate's cloud because regulators don't allow it. Users of HPC are also unlikely to want their IP floating around in someone else's cloud either. Companies like to be masters of their own destiny which is why they run their own server farms.
Then we have the practicality of all of this - a lot of HPC functions don't perform well in virtual environments. I can name Matlab as one shining example of something that works rapidly on bare-iron, has it's own inbuilt grid functionality, and runs like shit on virtualised hardware. As soon as you virtualise you add overhead and speed bumps and, much as vendors like to spout "typical slowdowns in the region of only 5-10%" I have witnessed intensive CPU<->Memory tasks (essentially what HPC is) suffer a slowdown such that a job will take almost twice as long on virtualised hardware. Virtualisation is great for many things, but HPC just isn't one of them - unless you're a company that cannot afford to run a server farm.