A friend (at BioWare) and I are cracking up, because we had considered the idea of doing EC2-based hosting of Minecraft (and Terraria) servers about 6 months ago. We ran an SMP server for a while, doing lots of performance testing and profiling.

However, we just couldn't see how we could get our margins to where they'd be worthwhile without raising the price of a hosted server to the point where it'd scare off potential customers. Low margins + a fair amount of customer support = something I didn't want to consider.

Kudos to someone putting the thought into that and solving the margin issue, spreading the per EC2-instance income over a much larger pool of people and raising the overall revenue-per-server.

In the meantime, I have other crazy ideas I'm working on while I try to line up a new day job. Good luck with this one!