You need to compare costs on the comparable commitment time-frame. You are assuming a 3 year commitment with Amazon. Classic hosting has a monthly commitment.
And even not taking in account the setup fee and the commitment, at 27$/month, you get a lot of power for your buck comparing to the cheapest dedicated server available at maybe something like 60$/month.
Cheapest dedicated box I could quickly find is at 59$/m, and even with a 2 years commitment you get "only" a 25% reduction which put you price at ~45$/m: