Also presumably they have the cluster well tuned, which is not simple, here is a relevant research paper about the scheduling algorithm which also goes into some of the tradeoffs and particularities of Hadoop on EC2: http://www.eecs.berkeley.edu/Pubs/TechRpts/2008/EECS-2008-99...
This can be pretty useful for data analysis and science. I don't see Amazon making money from this, but they must think the market is larger than I do. I may have to adjust my opinion.