Cloud can most definitely be cheaper than on prem when it is managed for scalability. It really depends on the use case, and once a company grows past a certain size with constant traffic then they probably should switch to on prem.

There are a lot of apps that the scalability makes a lot of sense for. Imagine a Christmas related web app. They only experience major traffic during the holidays, so scalable cloud resources would save a ton of money for that compared to an on prem solution.