The case for data in the cloud is strongest for global companies that require near constant uptime. You can't say let's do maintenance at 3 AM like you do in the States, because 3 AM is smack in the middle of the day for other parts of the World.

There is also a huge advantage for companies that need to offer access to data to external partners. The whole process of creating VPN tunnels, opening ports, etc. is no longer the sys admins nightmare.

And let's not forget the time and effort it takes to put purchase, install and configure hardware and SQL Server, then take care of the day-to-day patch management, tuning, etc.

I am not saying to put medical records, credit cards, SSNs on SQL Azure but there are MANY use cases where data can be hosted in the cloud with zero risk.