More information:

Cloud-init works from upstart (and on boot)  when I redirect the stderr
output.

The wrapper script becomes:

/usr/bin/cloud-init:

#!/bin/bash
/usr/bin/cloud-init.real $1 $2 $3 $4 > /dev/null 2>&1

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https://bugs.launchpad.net/bugs/1163536

Title:
  Cloud-init does not run from init, but runs when started manually

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