@Geek
"Too many people (non IT folk) seem to think that the cloud is this magical place that never has an issue."
True, but who's fault is that? Isn't this exactly their whole selling point to begin with?
I also don't think you should dismiss the whole argument that easily, because when properly set up you can get a redundant environment if you want to. The fact that it now doesn't work this way at AWS tells me more about their infrastructure than the (in)abilities of virtualized hosting.