There is nothing wrong with the cloud if you understand your roles and responsibilities. What exactly is the SLA for blogspot? I am guessing not 5 nines. And, what are the penalties for downtime?
Granted, Google Apps and Google Mail SLAs have relatively weak SLAs with no financial penalties if and when the services go down. But, you cannot make the case against cloud services based on this one "inconsequential" service.
But, as you stated, a hybrid strategy is probably the most effective approach. Azure has it right. I can throw my analysis services up in the cloud, but retain the data in-house. Not only is this more cost-effective, but it outsources what I need outsourced - processing power, not my intellectual property.
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