Everyone outside the largest 500 companies should stop reading? Wow! You wouldn’t happen to be a cloud evangelist or work for one of the hyperscalers would you?

The region I work in has little presence from global power players such as the top 500 yet a lot of companies and even SMB players are constantly being bitten by massive cloud bill shock here. So much so, cloud repatriation is rapidly growing here. The strategy of “Cloud First” for most organisations is just about gone and replaced with “Cloud Smart” strategies. One of the big banks here actually is in the final stages of moving away from one of the big three cloud providers due to cost and security reasons. What makes this interesting for this provider is this was their big customer success story for the region so other customers will no doubt have noticed this and ask the question why?
XaaS offerings from hardware vendors which use cloud-like consumption economics are also a big driving factor for cloud repatriation as customers are finding this opex model cheaper but they also have more or total environmental control. Cloud providers lack end to end transparency.

I’m also interested in your comment around how “everyone” has moved to hosted IDaaS providers for authentication and I am very curious to know what industry verticals you have worked in.
There are loads application providers for a lot of industry sectors (e.g. Health) which just won’t support their applications being used on servers in the cloud or even using IDaaS providers as the authorative authentication source for their apps. If they won’t support that kind of model, it has to be on prem AD or some other LDAP provider model for them.

Don’t get me wrong, I am not anti cloud but prefer to be what I call cloud pragmatic. It’s another tool in the box – not utopia. According to Gartner predictions from years ago, the cloud vs on prem war was for the large part meant to be over now. It’s very far from it and it shouldn’t be a war. Cloud has brought great benefits to everyone and shaken up the industry but it’s not the only solution.

As you say opinions my own – derived from a long technical career.

Now, let’s dive deeper into your suggestions. First it should be noted that only a very large enterprise could stomach investments like you are proposing (hyperscaler, multiple co-los, and owned facilities) so anyone outside the largest ~500 companies in the world should stop reading.
Next, we are led to believe this enterprise is very cost conscience based on these sneaky cloud bills; yet the alternative proposal is a “kitchen sink” approach where we get the worst cost-profile of all worlds. We reduce our purchasing power in the cloud AND with OEM vendors, we have to maintain skill sets for all deployments (VMWare / OpenShift does not exclude one from understanding AWS VPC / EC2 / IAM), and we purchase very expensive licensing for Openshift/Hashicorp/VMWare (which when deployed on AWS means we are paying for two hypervisors). But you’re right about those cloud bills, because if you run compute in the hyperscaler and your storage in a co-lo… your data transfer charges WILL be insane. Thank goodness we have not lost our competitive advantage, which we haven’t found yet since everything mentioned so far has been purchased.
Regarding Dev/Test in cloud and production in your co-lo. No serious company would test their software on different infrastructure than what will be used in production, this is literally the oldest reason in the book for production issues.
I’m tempted to not even address the LDAP/AD suggestion since everyone has already moved to hosted providers (Okta, Azure AD, etc.). But i’d love to hear more about this scenario where your hyperscalers are down, your co-lo is down, but everything is fine because LDAP/AD is running off a server under your desk.

Finally, back to your main point. Your business, whatever drives value for your customers/stakeholders, is what matters. If the setup above drives objective value for your business then you should do it; however if you find that maybe, just maybe, your customers don’t care how much you pay IBM and instead they care more about the website being down all the time. Well in that case you might want to stop making IT decisions based on non-business drivers. [Opinions my own, not employers]