Earlier quoted context omitted.
Exactly - how can I run a database server without EBS?
We use RDS (they now support Postgres) and Elasticache. The pricing seems reasonable for the performance (I've not done benchmarks if I'm being honest), and you get to treat all your EC2 instances as expendable.
Also, on EC2, EBS-backed instances boot faster [2]. Of course, you can (and should) still treat EBS-backed instances as expendable.
[1] http://aws.amazon.com/rds/faqs/#hardware-scaling
[2] http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/Component...