I get that, this makes total sense (considering your high prices for the cloud hosting), but your business started as a software, and some customers rely on that software.
I have my own server (by the way, costs less than your cheapest plan..) and I use it to host my Wordpress website. This website also includes the IPS forums, with tight connections between them (custom automatic SSO, articles->topic and comments->messages syncing, etc) - I technically can't and won't switch to cloud hosting just for the forums - it simply won't integrate well with my entire website that I have around the forums.
I believe you should offer your cloud hosting to the customers that are interested in that, and you can even have some cloud-only features if that it technically only possible to make these features under your own cloud platform.
But what I don't understand is why you are limiting and blocking features, that as far as I understand, CAN technically run on the self-hosted software, and it's limited just because you decided it should be a higher-tier only feature - and that tier is unavailable at all for self-hosted customers, for no real reason other them trying to lure them into the cloud hosting option.
Limit features - that's fine.
Create higher tiers - that's fine.
But let us actually choose these tiers, even if we choose to self-host the software on our own servers, for whatever (technical or not) reason.