I remember having to put in orders for pallets of servers which then ended up storage somewhere because there were not enough people to carry and wire them up and/or there wasn't enough rack space to install them.
Having an ability to spin up a server or a vm when you need it without having to ask a single question is very liberating. Sometimes such elasticity is exactly what's needed. OTOH other people's servers aren't always the wise choice, but you have to know both environments to make the right choice, and nowadays I feel most people don't really know anything about bare metal.
I spin up a VM on my xen vm estate whenever I want it with just some clickops or teraform (depending on the environment)
What do you think the pallets of servers were intended for
That's the beauty of VMs.
Luckily, Amazon is far from the only VM provider out there, so this discussion doesn't need to be polarized between "AWS everything" and "on-premise everything". You can rent VMs elsewhere for a fraction of the cost. There are many places that will rent you bare metal servers by the hour, just as if they were VMs. You can even mix VMs and bare metal servers in the same datacenter.
Not just spin up a server, you can spin up whole regions, even in foreign countries, at the click of a button.
the best is having rackspace & power but not enough cooling, hahaha murder me
That only happens when you have your own data center. That's a whole different issue and most people with their own hardware don't have their own data centers as it's not particularly cost efficient except at incredibly large scale.