Your parent is [rightfully] including bandwidth.
If he was able to get 1gbps unmetered, then the math is in the right ballpark (that's a huge
if though).
Still, I agree with the parent's general sentiment re price. The gap used to be much worse, but it's still anywhere from 2x-20x depending on what you're doing.
- EC2 prices are simply high and exclude things like bandwidth.
- The CPUs are usually 1-3 generations behind (they've gotten better with this).
- Virtualization adds overhead (again, this can be very significant if you're doing a lot of system calls)
- IO options are significantly worse
- Their network connectivity is, at best, average
You said it yourself, you're comparing a "terrible" deal to AWS and only saved 20%. Sounds to me like AWS is only 20% better than terrible ;)