Many B2B-type applications have a lot of usage during the workday and minimal usage outside of it. No reason to keep all that capacity running 24/7 when you only need most of it for ~8 hours per weekday. The cloud is perfect for that use case.
Scaling itself costs nothing, but saves money because you're not paying for unused capacity.
The main application I run operates in 7 countries globally, but the US is the only one that has enough usage to require additional capacity during the workday. So out of 720 hours in a 30 day month, cloud scaling allows me to pay for additional capacity for only the (roughly) 160 hours that it's actually needed. It's a significant cost saver.
And because the scaling is based on actual metrics, it won't scale up on a holiday when nobody is using the application. More cost savings.
Nice of you to assume that I don't understand the pricing of the services I use. I can assure you that I do, and I can also assure you that there is no such thing as provisioned vs on-demand pricing for Azure App Service until you get into the higher tiers. And even in those higher tiers, it's cheaper for me to use on-demand capacity.
Obviously what I'm saying will not apply to all use cases, but I'm only talking about mine.
Most people don't need to scale to a billion users overnight.