Earlier quoted context omitted.
It irks me that every time AWS comes up people compare the pricing with simple VPS providers that only sell virtual machines and a few bells and whistles. For starters, users that burn a lot of bandwidth probably don't do it by serving files from a VPS in a single location. In an AWS context, they may be using S3, Cloudfront and all the features and services that come with it. Setting all of that up on DIY VPS boxes…
That may be true, but try building a CDN on top of AWS and you'll be out of cash pretty quickly with their bandwidth prices.
Not to say that you couldn't build a CDN on AWS, but if you're going to do it, wanting to do it for cheaper than someone who doesn't pay markup on the same instances (Amazon) isn't realistic.