We rely on our server uptime because of someone else's electricity (we should just generate our own)
I haven't yet seen a datacenter (or even a server closet) that doesn't have at least a small UPS (to allow graceful shutdowns). For mission-critical environments, you actually *do* have back-up generators and the like (Think hospitals). Following that analogy, a hybrid option is actually one that might be worth pursuing, putting services into a cluster and having part of the cluster hosted on-premise.
It all comes down to cost-benefit-analysis. The problem with doing that in regards to cloud computing is that some of the variables are not only vague, but they might be completely unavailable. There is not really enough information to make rational decisions on such aspects as privacy, confidentiality, reliability, and so on. Some of these might get better defined over time (such as reliability), but with confidentiality it all comes down to trusting your cloud provider.