You can use abstraction layers to isolate yourself from issues with the underlying metal. For example, I had a good thread the last time the maintenance reboots happened: https://news.ycombinator.com/item?id=9120289.
Solving multi-tenancy issues is hard, but not impossible. I think it's a lot easier with live migration. If a box is giving you problems, just move the load to a new box while maintaining the same IP addressing.
With respect to cost, yes, AWS gets expensive at scale, but if you're at scale your servers are generally not your major cost center (it's usually payroll and licensing).
That is what I like about the cloud. Running in your own hardware lets you be, well, "lazy" about application architecture. Running in a place where it is shared and instances can disappear forces you to design a lot more robustly and nimbly.
Of course, that design discipline is great wherever you are running....
Now we get to the technical debt debate. Sometimes, you have to make good decisions now instead of perfect decisions later. The market doesn't care how elegant your code is.
Solving multi-tenancy issues is hard, but not impossible. I think it's a lot easier with live migration. If a box is giving you problems, just move the load to a new box while maintaining the same IP addressing.
With respect to cost, yes, AWS gets expensive at scale, but if you're at scale your servers are generally not your major cost center (it's usually payroll and licensing).