Yes, of course Mark Shuttleworth's personal blog is not bias (he's the owner of Canonical).
Also, he's talking about deployments on Digital Ocean, ie. VM's. I'm talking about what actually makes the "cloud", ie. the "cloud". The "cloud" is built out of RHEL/Centos for the most part. Almost all the major "cloud" infrastructures have been built with RHEL/Centos. We can speculate why... but Red Hat has built a $1 billion+ revenue per year company out of "cloud" and enterprise support contracts. (because they were there first, and they focused on it... and after it became profitable, then they finally branches out into other markets.)
The problem with Canonical IMO is they try to get into too many markets which ends up resulting in split finite resources. "Jack of all trades, master of none".
Free Desktop OS is a loss leader, no way they'll make significant profit out of that. Better to make the best Free Linux desktop OS in the world, get lots of people using it, hopefully among them some engineers, influencers, and decision makers, then provide server/cloud products and services based on that same tech.
For one single data point, that's exactly why I use Ubuntu server for all my cloud deployments - because I use Ubuntu desktop and know the Ubuntu/Debian ecosystem really well.
Nothing wrong with that current business model, any problems are more a matter of execution and competing against - as you point out - heavily entrenched first movers. But focusing on desktop won't save them, especially since desktop is saturated and already peaked. Cloud and mobile is where the growth is now.
Published stats [1] show that Ubuntu dominates cloud deployments.
[1] http://www.markshuttleworth.com/archives/1318