We are using AWS for our startup. Our bills are around $2200 a month. $1700 of that is a charge to have dedicated instances instead of shared. this gets us 6 servers - 4 small 2GB RAM web servers and 2 4GB ram DB servers (in reality what we need at the moment, we can scale the DB later when we bottle neck).
We've done the math ourselves and in reality we could probably save some money (face value) or buying servers ourselves and colocating them. But, then you have to add in the maintenance costs, a part time infrastructure support person, downtime, replication, etc. Plus, things like good firewalls, load balancers, are terribly expensive which we didn't factor into the equation.
In reality, it boils down to convenience for us to stick with AWS, though it maybe a slight premium in the end. It simply cuts out a lot of costs having to deal with infrastructure.
Is AWS perfect? No, not really. Any big storm you pray to baby Jesus US-EAST stays up. But, we've been happy so far with it. I'd say all in all it isn't even a premium, factoring in all the costs it is probably break even at this point. But for us we were able to scale from $200 in server costs a month to $2000 a month easily and we can scale to $10000 a month easily. it has its value.