The argument for RDS (and other services along those lines) is "we can't do it as good, for less".

And, when factoring in all costs and considering all things the service takes care of, it seems like a reasonable assumption that in a free market a team that specializes in optimizing this entire operation will sell you a db service at a better net rate than you would be able to achieve on your own.

Which might still turn out to be false, but I don't think it's obvious why.