As others have noted, there's a difference between
(which we do - we've spent a lot of time, money and effort to ensure
that stuff like dumps.wikimedia.org
works reliably even at enwiki
scale) and providing a working environment for the dev community.
Having a primary working environment like Labs makes sense in much the
same way that it makes sense to have a primary multimedia repository
like Commons (and Wikidata, and in future probably a gadget
repository, a Lua script repository, etc.). It enables community
network effects and economies of scale that can't easily be replicated
and reduces wasteful duplication of effort.
I'd like to go a little further on this point.
One of the goals of Labs is to have a fully virtualized clone of our
entire infrastructure that is also completely puppetized in a way
that's reusable by third parties. If you're worried about WMF, then
you should participate in Labs. You should help puppetize and should
help make everything usable by non-WMF entities.
Bringing community operations members back into the operations of the
site is another one of the goals of Labs. If we have enough community
operations people, then the projects aren't dependent on the knowledge
of the staff to survive.
If WMF becomes evil, fork the entire infrastructure into EC2,
Rackspace cloud, HP cloud, etc. and bring the community operations
people along for the ride. Hell, use the replicated databases in Labs
to populate your database in the cloud.