1) You may more than pay for that labor in cloud costs, but you can also pretty easily operate rented dedicated hardware with a 3-man team if they know how to do it, the tools to scale are there they're just
different.2) I don't know what your setup looks like, but renting a dedicated server off of Hetzner takes a few minutes, maybe hours at most.
My personal opinion is that most workloads that have a load balancer anyways would be best suited to a mix of dedicated/owned infrastructure for baseline operation and dynamic scaling to a cloud for burst. The downsides to that approach are it requires all of skillset A (systems administration, devops) and some amount of skillset B (public cloud), and the networking constraints can be challenging depending on how state is managed.