One end is PaaS like Heroku, where you just git push. The other end is bare metal hosting.
Every option you mentioned (VPS, Manages K8S, Self Hosted K8S, etc) they all fall somewhere between these two ends of the spectrum.
If, a developer falls into any of these "groups" or has a preference/position on any of these solutions, they are just called juniors.
Where you end up in this spectrum is a matter of cost benefit. Nothing else. And that calculation always changes.
Those options only make sense where the cost of someone else managing it for you for a small premium gets higher than the opportunity/labor cost of you doing it yourself.
So, as a business, you _should_ not have a preference to stick to. You should probably start with PaaS, and as you grow, if PaaS costs get too high, slowly graduate into more self-managed things.
A company like fly.io is a PaaS. Their audience has always been, and will always be application developers who prefer to do nothing low-level. How did they forget this?
This is where I see things too. When you start out, all your value comes from working on your core problem.
eg: You'd be crazy to start a CRM software business by building your own physical datacenter. It makes sense to use a PaaS that abstracts as much away as possible for you so you can focus on the actual thing that generates value.
As you grow, the high abstraction PaaS gets increasingly expensive, and at some point bubbles up to where it's the most valuable thing to work on. This typically means moving down a layer or two. Then you go back to improving your actual software.
You go through this a bunch of times, and over time grow teams dedicated to this work. Given enough time and continuous growth, it should eventually make sense to run your own data centers, or even build your own silicon, but of course very few companies get to that level. Instead most settle somewhere in the vast spectrum of the middle, with a mix of different services/components all done at different levels of abstraction.
You're not wrong that there's a PaaS/public-cloud dividing line, and that we're at an odd place between those two things. But I mean, no, it is not the case that our audience is strictly developers who do nothing low-level. I spent months of my life getting _UDP_ working for Fly apps!