This is correct, in the job configuration only the initial data is loaded from s3, afterwards you can chain mapreduce steps that run off hdfs on the local machines.

Step 1: "-input", "s3n://elasticmapreduce/samples/similarity/lastfm/input/", "-output", "hdfs:///home/hadoop/output2/",

Step 2:

"-input", "hdfs:///home/hadoop/output2/", "-output", "hdfs:///home/hadoop/output3/",

etc..

There is no explicit support for mounting data from EBS yet, but in theory I think you can hack something together in the initial mapper to mount an EBS volume to be used in the second map task...