One of the key benefits of EC2 and other cloud offerings is that, in a properly automated environment, it is faster and easier to replace a faulty node than to troubleshoot it. The same is true for upgrades - simply boot a new instance from an updated AMI or Chef/Puppet/Cfengine/RightScale config and point traffic at the new server. Minimal wheelspin, minimal downtime.
Those who use this new feature to take a, for lack of a better term, "server-hugger" approach to cloud computing will miss out on this. Though it may reduce their cloud onboarding time, it's inefficient in the long term and will be an operational burden as the environment grows.