Take for example, there is no way a company as big as Amazon would want to shut down a service without announcing it first and giving their customers who use that service time to transfer their documents to another company that provides the same service(like they just did in this case).
I have read about more than one instance of a user storing a seed phrase or private key in the drafts of some email provider, who have shut down without warning. Amazon might have given a warning, but many won't.
So the major reason why storing seeds and private keys online is frowned at is because of hack, most especially for newbies who don't know how to use strong passwords for their account security, and some also do not know how to use 2FAs, such account can easily be hacked, so this is why it is better to keep your seed phrases offline for better security.
This isn't the most likely attack either. Even if I used a truly random password of 500+ characters along with a hardware key 2FA, I would still never store anything valuable on the cloud (i.e. someone else's computer). You have absolutely
no idea how good their security is, if your data is transferred securely, stored securely, how many times it is copied, in how many servers all around the world it is stored, where these servers are, who can access these servers digitally, who can access these servers physically, and so on. Even if your account is not hacked there are a million ways that your data could be stolen or lost.
