Great post, good observations about the different mindset from on-prem to cloud and how things change. Customers can still get rattled with losing the controls they had before and not having an equivalent safety net. Say what you will about on-prem backups but they are tangible and generally understood, going back many years if needed. This is when some customers may look at third-party solutions and there are many options out there that can fill a perceived gap. Also, of course, different companies may have industry-specific requirements for very stringent compliance requirements.
For many though, if not most, we can just benefit from taking advantage of these enlightened services that take most of these concerns away. I like that Microsoft gives us options as well, for example, the upcoming self-service OneDrive File Restore service looks great and is pitched as a remedy for major data loss scenarios.