I agree that for just static VMs AWS is not a good deal. I meant that if you're still stuck with a VM architecture (using Chef/Puppet instead of a container scheduler) in many cases it makes sense to pay for AWS services (such as running a database for you) instead of doing it yourself. I think container schedulers will change that balance for many companies, making self managed service attractive for smaller organizations than before.

But Netflix! /s

Netflix serves an evening rush concentrated in the 4 US time zones; they actually use elasticity.

Netflix is also almost certainly far into the "contact us" price tiers, so they're a useless example for cost-effectiveness of AWS unless/until they actually publish what they pay. If it's anything near the listed tiers, they're being ripped off, based on what little I know of the kind of discounts much smaller players have negotiated.