Interesting... any current Amazon employee that can confirm/deny this? Perhaps things have changed since 2007.
tl;dr The organic migration to AWS started in 2006 and continues to this day.
http://psav.mediasite.com/mediasite/Viewer/?peid=7ab95f6a5d4...
I'm not saying that nobody in Amazon wanted to use AWS, just that we didn't know about it until the press release, and so there wasn't any opportunity to use it... and of course, all the code from the 1990s was built in a different way so it would have been nontrivial to migrate it.