Amazon should complement this new transcoding service and their existing media streaming (via Cloudfront) with a full media server, along the lines of Red5 or Wowza or Adobe Media Server, that would allow you to do more advanced stuff, such as capturing video from users, hosting video chatrooms etc.
You can already run Wowza instances on EC2 but the premium on top of standard AWS prices is too high, if this functionality can be commoditized there will be an explosion of innovative new uses.