It is fucking
expensive.
A solution like this is a clever hack, because it's taking advantage of an immense economy of scale provided by a company with really deep pockets operating on a multinational pool of servers that still on balance see a wide variety of different use cases, allowing for a lot of distributed load.
Imagine if every user was demanding that same level. As I write this, Steam is counting over 8 million players logged on. Now imagine trying to imagine trying to guarantee them all gaming-level real time performance (fun note here: that GRID card used for the AMI costs $2,000 alone), and doing it all on a reasonable price.
Even our Amazon hack isn't doing that. 50 cents an hour doesn't sound like much, but the average gamer is putting in 22 hours a week. Some five million enthusiasts are regularly pulling 40. That's anywhere from $40-80 a month. Not to mention the cost of the games themselves.
OnLive was trying to offer this for $15 a month. And originally, they were even footing the cost of the games, aiming for a Netflix/Gametap approach (the latter of which also failed, I might add).
Unsurprisingly, they went spectacularly broke.