I have exactly the same architecture. You can easily administer a postgres/mysql on your own infrastructure, but it's also the one thing where backups and availability are super strict. I can easily support multi-region in Google Cloud or AWS and that's way harder to do on-prem, and it's also hard to handle the replication story as safely as with Google Cloud. The hope is that GCP et al. give you safety and availability for the control plane stuff and you can run your data plane on-prem.
At $2m/mo spend, this kind of thing is insane. GCP has never been the most reliable of clouds but this is pretty awful. I would never have expected this.
I have kind of the same architecture. I host multiple dedicated servers and vps instances in the Hetzner "cloud", but all of these connect to a few hosted databases by Hetzners web hosting packages for like 20 bucks a month. It sounds insane, but the one thing that absolutely needs to stay online, is the database, so not hosting this myself makes sense. And since Hetzner is apparently tuned their dirt cheap databases pretty well, we can hammer them pretty hard without any problems.