That argument is compelling only at a first glance IMO. If you take a look at it another way then:
1. The self-hosting sweat and nerves are spent only once, 80% of them anyway (you still have to maintain every now and then e.g. upgrade).
2. The cloud setup will require babysitting as well and as such the argument that you only pay someone salary when self-hosting does not hold water.
Ultimately it's a tradeoff between (a) the short- or long-term thinking of leadership, (b) in-house expertise and (c) how much money are you willing to throw at the problem for the promised shorter timelines -- and that one is assuming you'll find high-quality cloud hosting engineers which, believe me, is far from a given.
AWS and DigitalOcean = $559.36 monthly or Hetzner = $132.96 The cost of an engineer to set up and maintain a bare metal k8s cluster is going to far exceed the roughly $400 monthly savings.
If you run things yourself and can invest sweat equity, this makes some sense. But for any company with a payroll this does not math out.