And you have to figure out what a "reserved instance" is. Because that saves you 70%. And so, if you miss that small point, then you are wildly over paying. But who can learn all these details in a short amount of time?
The situation is analogous to "base-load vs peak-load" on the power grid. Base-load power (reserved instances) are very cheap but cannot respond to transient spikes in the load. Peaking plants (on-demand instances) can respond to transient spikes quickly, but are expensive to run.
A naieve model is that you find your minimum usage and buy enough baseload to cover that, with peaking beyond that. However, since peaking is so much more expensive than baseload this is not necessarily optimal - instead, you may want to buy some extra baseload that isn't fully utilized during your off-hours, because that offsets expensive peaking capacity during your high-demand hours.
You almost certainly would not want to have zero reserved instances.
If you're paying for X1 servers for an extended period of time on an hourly basis, you should be entitled to a thank you note from Jeff Bezos.