I like how you have a home smartcard. I can’t believe many do.

Pretty much anyone should do. There's no excuse to at least keep your personal PGP keys in some USB dongle. I personally wouldn't recommend yubikey for various reasons, but there are a lot more options nowadays. Most of those vendors also now have HSM options which are reasonably priced and scale well enough for small hosting purposes.

I started a long time ago with empty smartcards and a custom card applet - back then it was quite complicated to find empty smartcards as a private customer. By now I've also switched to readily available modules.

Why do you think cloud operators are lying?

One of the key concepts of the cloud is that your VMs are not tied to physical hardware. Which in turn means the key storage also isn't - which means extraction of keys is possible. Now they'll tell you some nonsense how they utilize cryptography to make it secure - but you can't beat "key extraction is not possible at all".

For the other bits I've mentioned a few times side channel attacks. Then there's AMDs encrypted memory (SEV) claiming to fully isolate VMs from each other, with multiple published attacks. And we have AMDs PSP and intels ME, both with multiple published attacks. I think there also was a published attack against the key storage I described above, but I don't remember the name.

I agree that our stuff is unlikely to be victim of an targeted attack in the cloud - but could be impacted by a targeted attack on something sharing bare metal with you. Or somebody just managed to perfect one of the currently possible attacks to run them larger scale for data collection - in all cases you're unlikely to be properly informed about the data loss.