As a startup, my reason for using "cloud" (PaaS) is not to catch spikes, but because of focus. Every hour that I spend running around with HDDs, screwdrivers (or the cloud version thereof - storage, ansible, etc) is an hour that I'm not spending on stuff my customers need.
Why would this be any different for a government?
We don't expect our government to build their own cars, but to buy them from Volkswagen or Renault. Even when the government has a clear need for transport. Why do we then insist they build their own IT infrastructure?
So should a government (e.g. the police) produce its own cars, rather then buy them? Or set up a factory to make laptops?
I'm not trying to be pedantic. I'm trying to understand where the line lies (and whether that line is universal for all governments on all layers in all countries).
Your examples do not make sense on prem existed long before cloud and some shops were perfectly fine with it. If the police were producing perfectly fine cars and then they went for a car share program then I would argue that yes it may be reasonable for them to consider going back to producing cars.
Why would this be any different for a government?
We don't expect our government to build their own cars, but to buy them from Volkswagen or Renault. Even when the government has a clear need for transport. Why do we then insist they build their own IT infrastructure?