there's already some virtualization going on. (I heard that what people see as us-east-1a might be us-east-1c for others to spread the load. though obviously it's still too big.)
The services that fail on AWS’ side are usually multi zone failures anyway, so maybe it wouldn’t help.
I’ve often wondered why they don’t make a secret region just for themselves to isolate the control plane but maybe they think dogfooding us-east-1 is important (it probably wouldn’t help much anyway, a meteor could just as easily strike us-secret-1).