If you can use JDBC or SQL in your Java app with these Amazon solutions and not have to learn a new datastore API that's a pretty huge advantage.

AWS is not without it's "cool" storage: SimpleDB, S3, RDS. Not to mention, being within AWS with full control of your machines, you can setup any database you'd like.

To me, the limitations of App Engine are things like having to use a crippled version of the programming environment (as you don't get your own computer, so they've neutered things down to something "safe") and a bunch of limitations on CPU time, request length, and background processing.

(edit: I had somehow read what you said to mean, "no, but with these new limitations", so arguably I should just delete my response here, but I think that a specific list of things might be valuable still)

I agree. It's definitely meh without a useful and truly scalable database. That's the hard part. SimpleDB isn't particularly useful, and RDB isn't particularly scalable.