Rarely do startups fail because of a decision like self hosting or not. In many cases it isnt even a few bad decisions but a long series of them plus outside factors which are uncontrollable.

In my experience the aws problem isnt so much that aws is that costly relative to bare metal but that most people do not execute well on aws over provisioning like mad to solve design issues.

There is a perverse benefit to sales at aws to push nonsense product too because of incentives. But people forget that aws isnt even as bad as a ton of other company spend. I have seen a fortune 100 add a few mm to their annual salesforce contract “for funnzies” because at their scale it wasnt that much money.