There are still self hosted places today, not everything is cloud based.
Also, there isn't more competition largely because of Amazon so, while I agree with the sentiment that it could improve things, in practice it's a moot point.
The problem is far more pervasive than any single incident, allowing a single megacorporation to control most of the Internet is a bad idea for many reasons. The Internet is supposed to be decentralized, it was even designed to withstand a nuclear war with that principal in mind. Even with a robust, distributed network with redundant backups, if it's still all controlled by one company, that is still a very precarious situation.
If we want a truly robust system, yeah, we kinda do. This sort of event is only one of the issues with allowing a single entity to control pretty much everything.
There are plenty of potential issues from a corrupt rogue corporation hijacking everything to attacks to internal fuck-ups like we just experienced. Sure, they can design a better cloud, but at the end of the day, it's still their cloud. The Internet needs to be less centralized, not more (and I don't just mean that purely in terms of infrastructure, though that is included of course).
A brunnel? A tridge?