Does Mysql lend itself innately to scalability at Amazon/Google scale that is hard to do with Postgres ?
Disclaimer: I'm a developer on Cloud SQL.
In fact, I would say that you would have a large segment of people/startups interested in leveraging postgresql on the cloud without the headache of managing replication,etc.
The goal of Cloud is to provide the building blocks so people can make great products. The quickest way to making good stuff is to use the same tools that everyone is already familiar with, and I think that's why Cloud SQL exists. If you want more "touch" on the database for more power, there's Cloud Datastore [1]. But we support companies like Costco on Cloud SQL, so it's good for a lot of folks.
http://aws.amazon.com/rds/postgresql/details/
Also I think it is just because MySQL is generally more popular than PG, so it is deployed first in most cases, with PG support being added later.
I dont know why the situation is so bad. Rackspace, for all its much-vaunted "fanatical support", refuses to touch Postgres.
They probably don't want to take on the operational burden adding a 2nd DB would entail vs. the added revenue it might generate.
No, quite the opposite actually. Mysql scales poorly with high concurrency, and replication suffers from "oops I stopped working and you have to manually intervene now" syndrome.
They use mysql because it is what most customers want.