Of course for people who want a hosted solution, the fact that it is hosted, is what gives it a lot of value. There haven't been a lot of hosted NoSQL databases, at least on this scale and availability, out there.
But technologically, what's new here? Is there anything here that is really innovative? (not a sarcastic question)
DynamoDB does have at least one significant feature not provided by Riak -- range scans. This makes many common access patterns much easier to implement efficiently. Still, as you suggest, there don't appear to be any fundamental technical advances here. The advances are in the service model and operation.
And there are, of course, many limitations. (Just to name a few: items -- i.e. rows -- can't exceed 64K; queries don't use consistent reads; seemingly no atomic update of multiple items.) It's miles ahead of SimpleDB, but still not nearly as flexible as many of the existing NoSQL databases. If Amazon lives up to past performance, they'll make steady improvements, but slowly.
Riak has the ability to select keys for processing via various queries, including range of the key.
Riak also has secondary indexes and full text search.
If there's something significant about the DynamoDB method of doing range scans I'm interested in hearing it. My purpose here isn't so much to bash DynamoDB (in fact, I don't want to do that at all) but to try and spread a little more awareness of Riak.
Riak really came into its own in 1.0.
Based on the resources I can find online, any select-by-range operation in Riak requires broadcasting to all nodes (or at least enough nodes to hit at least one replica of each record), and then performing a scatter-gather operation to fetch the matching records. There also doesn't seem to be any way to specify a sorting order. This is not quite what I would call a range scan: while useful, it presumably doesn't have the same cost or scaling characteristics. It's the difference between scanning a block of data that is stored contiguously, and filtering through an entire table to identify records meeting a criterion which happens to take the form "a <= value <= b".
This is not to diss Riak, which is a nice piece of work and does many things that DynamoDB doesn't.
I'm not hating on Amazon, it is a good move for them and they are doing some things that Riak cannot do, but cost and response is not one of them.
On the price: If you would get 3x16 GB machines with Joyent, that would cost you 1400$/month. You can get a lot of resources for that with this new AWS service.
I don't have any experience with either Joyent or this new DynamoDB, but I do have some experience with Riak, and from the docs this new service would be a very viable competitor.
Not mentioned here - DynamoDB also has built in monitoring and management.