Amazon must be assuming that anyone seriously interested in this service spends well over $88,000/year on servers, which is likely the case.
As someone else explained, that's per-region. So if you have a lot of servers in a region, that cost is amortized over all of them.
That's $86,700 per year, not cheap to say the least. Is that kind of setup good enough for some level of PCI compliance? I think they still require that your servers are physically secure.
Yes Amazon has PCI compliance now, well the parts they need. The physical security is fine too, their datacentres are well secured. So this type of workload is possible.