Topic: Cloud Hosting

I want to discuss Cloud Hosting a bit.

I got an offer for a cooperation with a server hoster, who likes us to use his new cloud service instead of a traditional setup.
Normally I'd rent a bunch of root servers and dedicate them to their jobs, nginx servers, database servers (using mongos sharding setup), load balancers, the usual.

Now Cloud Hosting in general suggests that I can use a cloud for anything and looking into it (here is a very cool demonstration: rails cloud ecosystem video presentation), it seems great.

But what some cloud hosters are trying to make me believe is that a cloud can act just like any server setup, but it would scale much easier, since you can add performance at all times. Then I noticed that the usual cloud services are very specific, heroku does the rails part, mongohq the database part, and are in fact not perfectly scalable all purpose servers, but each cover a specific field.

So the question is: Can Cloud Hosting work, when it does not opt for a very specific setup? Like Apache + MySQL, or Nginx + MongoDB.
Especially when a hoster offers the use of any technology I like, no restrictions, the cloud will handle it.

And further: Can clouds compensate specific setups, e.g. exactly how my replica sets / shards / mirrors ... should be handled.

Thank you for sharing your thoughts.