Author here. I agree with your points! I use AWS for a computational biology company I'm working on. A lot of scientific computing can spin up and down within a couple hours on AWS and benefits from fast turnaround. Most academic HPCs (by # of clusters) are slower than a mega-cluster on AWS, not well utilized, and have a lot of bureaucratic process.
That said, most of scientific computing (by % of total compute) happens in a different context. There's often a physical machine within the organization that's creating data (e.g. a DNA sequencer, particle accelerator, etc), and a well-maintained HPC cluster that analyzes that data. The researchers have already waited months for their data, so another couple weeks in a queue doesn't impact their cycle.
For that context, AWS doesn't really make sense. I do think there's room for a cloud provider that's geared towards an HPC use-case, and doesn't have the app-inspired limits (e.g data transfer) like AWS, GCP, and Azure.