The problem is creating a single point of failure.

There's no doubt a VM in AWS is exponentially more redundant than my VM running on a couple of Intel NUCs in my closet.

The difference is, when I have a major outage, my blog goes down.

When EC2 has a major outage, all of the blogs go down. Along with Wikipedia, Starbucks, and half the internet.

That single point of failure is the issue.

Single point of failure means exactly opposite of what you think it means. If my work depends on 5 services to be up, each service would be a single point of failure, and correlation of failure is good for probability that I can do my work.