There is a size where on prem would be much cheaper on paper, but internal red tape for access to internal resources is such that teams are unnecessarily slowed down. For example I once worked at a place where it took several months to get an additional on-prem box to speed up our CI pipeline.
Of course you can also add that amount of red tape to a cloud solution, but in my experience it's easier to get approval for an additional EC2 box.
Yes, this is the awkward phase of on-prem. Some companies stay there forever. Good companies will continue innovating and treat the time to resolution of your request as a KPI to reduce down to days, minutes, or even seconds.
