Renting bare metal is exactly how the business worked prior to the rise of EC2. e.g Rackspace, Linode.
You can rent vs buy at any level : rent only machines, rent a 1/2 a rack, rent a full rack, rent a cage, rent 1/2 a dc, and so on.
Same with connectivity: you can plug your machines into a lan managed by the hosting provider, or run your own routers and peer with their in-house ISP, or you can buy peering directly in the building, or you can rent lightpath from a telco with pop in the building, or you can go rent a backhoe and start trenching across the parking lot...
You can rent vs buy at any level : rent only machines, rent a 1/2 a rack, rent a full rack, rent a cage, rent 1/2 a dc, and so on.
Same with connectivity: you can plug your machines into a lan managed by the hosting provider, or run your own routers and peer with their in-house ISP, or you can buy peering directly in the building, or you can rent lightpath from a telco with pop in the building, or you can go rent a backhoe and start trenching across the parking lot...