"as people flee from expensive, old-style IT into roughly equivalent [cloudy paradise]"
Of course, old-style IT is doomed because the Cloud is better and cheaper.
Sure it is.
Except if you don't want governments snooping through your data.
Except if you don't want hackers snooping through your data.
Except if you're not sure your ISP can guarantee the link to your data.
Except if you want to be sure that, in five years time, automagical updates of your on-line applications haven't rendered your old data unreadable.
Except if you want to have an actual person on call in case of trouble, instead of an automated answering machine that will, after x hours, connect you to someone in Bangalore who calls himself Jonathan.
And don't tell me that it is just a question of negociating the proper conditions. SMEs don't have the means to negociate anything near those conditions.