Those local options exist, and have been around forever, but the problem is nobody is doing it without cutting corners and with pay-as-you-go elasticity (and the 'call an API, get a VM instantly' effects that go with it).

Most on-prem deployments were trash and a lot of them still are. Not because it couldn't be better but because it's easier to just have some random hypervisor department do this work manually and not do the work to create it as an internal product. Even VMware with vrealize failed and that's about as 'customisable cloud platform in a box' as COTS enterprise software can get.

Maybe it's because IaC and APIs were just not in the vocabulary of the average system integrator or on-prem operating team (it's still lots of clickops and copy-paste).