You are generally right, except that you don't seem to know the history of major AWS outages. Failures in AWS in us-east-1, which is the first AWS cloud region, often cause cascading worldwide failures in the whole of AWS - especially failures related to DNS and to DynamoDB, if I remember correctly. That is, AWS workloada running in, say, eu-west-1 (and in fact in the whole of AWS) often start failing or at least having greatly degraded performance/availability because of a failure in AWS infra in their core region.
If AWS themselves can't handle cross region isolation and availability well, my expectations for most companies running on top of AWS are quite modest.
It's because AWS runs their control plane out of us-east-1, particularly lambda. There are also some very popular services that can only be run out of us-east-1. It's not really a technological constraint, it's a design decision.
Wait so then how are they signing big customers still who would definitely lose a lot if us-east-1 went down?
(who would be motivated to check if anything is restricted to only us-east-1)