Frankfurt makes sense for European companies. Having it anywhere but Germany would also make it basically worthless for German companies because the cloud provider can't be expected to follow the laws German companies building their stacks on top of it would have to comply with.
Most of the regulatory requirements only come into play if you are not only hosted in Germany but also target German customers (e.g. offer your services in German language to residents of Germany) at which point where you are hosted only affects how easy it is to make you comply with those regulations.
Sure, this is a bad choice if you're Facebook and don't want to have to deal with those pesky customer rights and be able to abuse all your users' data without their consent, but I'd rather have a cloud provider with a DC I can hold accountable and plenty of German companies are willing to pay a premium for that vs the typically much cheaper US DCs.
Most of the regulatory requirements only come into play if you are not only hosted in Germany but also target German customers (e.g. offer your services in German language to residents of Germany) at which point where you are hosted only affects how easy it is to make you comply with those regulations.
Sure, this is a bad choice if you're Facebook and don't want to have to deal with those pesky customer rights and be able to abuse all your users' data without their consent, but I'd rather have a cloud provider with a DC I can hold accountable and plenty of German companies are willing to pay a premium for that vs the typically much cheaper US DCs.