In this video [1], Foursquare says the biggest problem they're facing with EC2 is consistency in I/O performance. They say that the instance storage simply isn't fast enough for them, and while EBS is fast enough when RAIDed, it isn't consistent since it isn't local (EBS is traffic goes over the network). Reddit has also complained about EBS, but they've been able to move onto the instance storage.
If you're willing to reserve the instance for 3 years, the average monthly cost becomes only $656. That's quite a good deal.
Foursquare says in that video they're planning to migrate off of EC2, in part due to I/O performance. I'll be interested to hear whether or not this instance type changes their minds.
[1] http://www.10gen.com/presentations/MongoNYC-2012/MongoDB-at-...