I would bet the vast vast majority of aws customers are not there because of the dynamic resource scaling. Rather, they're there because aws has become the default system provider. At least for the sfbay startup.

I agree, they are very expensive for what you get at any even modest scale. (Except for s3 which is absolutely amazing). However, if you want to run your own stuff, you're buying into knowing the details of how it works. eg you better understand what vacuum is for pg, and how it interacts with availability, and be willing to create backups, etc. AWS does do real work; it's just expensive.