And you can pay much less than half that via custom server builds and colocation. It is just a matter of how far down the chain you want to go, given your expertise and sensitivity to hardware costs.

He doesn't actually have to keep replacement parts in the datacenter or have staff close by to the datacenter to go and perform replacements or new installs, or worse - pay >100$/hr. for remote hands with colo.

Over time it's certainly more expensive to rent, but you get to cancel and move on to better hardware when it comes out, without having to worry about re-purposing or selling old servers.

I don't keep hardware spares for my 300+ infrastructure as our hardware provider has 24 hour turnaround on warranty replacements.

As for re-purposing, I have tons of uses for older hardware to do background computation or other jobs. I suspect I can extend the lifetime to 5+ years on most of it, which is quite good in my opinion. You just need to design your system with modularity in mind, which you should be doing regardless of your hosting choices.