They are massive networks of data centers with extremely high availability located in many places around the globe
aka they are servers hosted around the world. No different from what dedicated servers have done for years, just on a larger scale.
Yes the services are running remotely but they are also being virtualized across thousands of processors at a time.
aka what server farms have been doing for decades
Processing is split up and parallel-ized at an rate that has never before been seen.
Only because the scale is larger now with AWS and Azure.
Almost all Hollywood CGI rendering is now done on public cloud services, as an example, due to the ability to spin up thousands of cores of processing on-demand and then release those resources upon completion.
...aka exactly what they were doing before with on-site servers, only on AWS or Azure. The tech isn't different, its just out sourced.
It's orders of magnitude cheaper than building and running their own bare metal facilities.
In some cases it is, for my company it was cheaper to go in house due to the power we neeed. I know Shopify uses AWS internally, but they have a tool set up that throttles their AWS usage so they don't spend millions by accident.
It's not cheaper, it different.
Aside from the size of infrastructure available, the management software that load-balances and dynamically expands and contracts to meet demand is unique to the Cloud industry.
It isn't, OpenStack has existed for ages now. It just has a sexy new name.
Games like Titanfall offload enormous amounts of work to the cloud, from physics calculations to AI interactions.
aka what dedicated servers have been doing since the 90's only
I'm not sure why you categorize it as a "technological misstep".
It's a problem because now we're tied to the developer. When EA decides that Titanfall isn't worth it anymore, they'll drop support and we'll never be able to play it again. The community will live as long as EA wants it to.
With actual, real life, 3rd party servers we will never have that issue. You can still host CoD4 servers no problem.