I think that's a little pedantic. The point he was making is that, conceptually speaking, the cloud is comprised of servers not unlike the servers you run yourself. The difference, obviously, is who runs them, the manner in which they're run, the exact manner in which they're utilized by you, etc., but they are still just servers at the bottom of the stack.
"The point he was making is that, conceptually speaking, the cloud is comprised of servers"
But... that "point" is trivial.
Did anyone ever claim that cloud servers are made of magic pixie dust? No.
The real "point" is that, cloud = hardware + service, with service > 0.
As the OP describes, GitLab tries to do their own service (because service is expensive... it is), and they find out, the hard way, that the "service" part is not easy at all.
Amazon & Microsoft & Google run millions of servers each, so they can afford to hire really good people, and establish really
good procedures, and so on.