Talking from personal experience, I own and administer several webservers - dedicated and cloud - and I must say benefits of cloud servers (scalability, scheduled backups, low cost at startup,...) outweigh dedicated.
Again, I personally think it comes down to what the client is looking for.
If someone is just starting out in the industry they typically have minimal capital to invest. So VPS, cloud, virtual are better solutions for them.
However, once you start making some dead way and have some money making sites. You typically want the security and dependability of a dedicated box. Preferably managed. However, when you get into dedicated boxes, depending on the host and plans, it can get pricey with set up fees (if they have them) among other things.
I think it comes down the cost and personal preference in the end. I know I would never trust my membership sites, or bigger traffic sites, to a cloud type of environment. But that's just me. I have been in this since 1997, and will openly admit to having a preference based on my own experiences.
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