Cob, quick answer to your question (more formal Steemit post to follow). There are advantages & disadvantages in having your BP in a physical location, however the local infrastructure must meet a minimum requirements (reliability, uptime, bandwidth, maintenance) which are all factors that AWS takes care of.
As for being centralized, AWS does operate in different countries under their respectful jurisdiction, for example in Canada we have AWS Canada (https://aws.amazon.com/canada). Also once the EOS BP infrastructure needs to scale, we will see more Hybrid approaches (cloud & physical location), since EOS at the moment is only single threaded, it's best to set up the most reliable server initially and scale afterwards when the software offers parallelism.
EOS Nation will gather up all questions related to "Cloud vs. Physical Location" and answer them in our future Steemit posts.