the hardware would be sitting there sleeping. Probably not very cost-effective for enterprises.

Not to be condescending, but idle hardware isn't even on the radar as far as waste goes in enterprises. An on-prem solution that is idle for 364 days of the year is completely fine for most of these companies.

For the ones that do care, that's what they make virtual machines and over-subscription for if they even care the slightest about that.