Tradeoffs...
Hmm, the more I think about it, the more it seems that cloud vs local is a set of relative risks. For example, we've been through a "centralising crusade" where all the servers got moved centrally and virtualised. On the one hand, overall uptime is higher but on the other hand if things go down then it takes ages for the central guys to respond since we are only one piece of the larger company. Whereas before the problem would be fixed in minutes or even noticed by the local IT guys before I could even log a job. I would guess that 'cloud' solutions will make this tradeoff bigger: even better uptime, but even worse responsiveness/effects if things go wrong.
Perhaps the focus is too much on the engineering feat involved. That is, 99.9% uptime is only 1% more than 99%, but 10x harder to do (reducing the 'error' from 1% to 0.1%). On the other hand, 5 minutes till a fix is 12x faster than an hour but not a marvel of engineering (just needs someone nearby with admin rights). The former seems to give a CIO much more to boast about, but I know I preferred reasonable uptime with fast responsiveness.