The variable workload has been a little less important with reserved instances. They used to have a "light/heavy utilization" pricing structure but now it's basically cheaper to reserve the instance than it is to scale it up and down, unless you need the extra capacity less than 60% of the time.
That's going between 1 and 0 servers for an instance. Real scaling needs are met in a setup going from 3-50+ servers throughout the week.
I think you misunderstand me. Doing 100 servers for 16 hours and scaling down to 30 servers for 8 hours a day is more expensive than running 100 reserved instances for 24 hours a day. (100 reserved instances == average of 60 on demand instances).
But yeah, AWS generally is expensive, which is part of why it's making so much money.
It definitely makes business sense to try to avoid locking yourself in to AWS but at the same time it's a good place to ramp up or test your business ideas without needing to invest a lot of money in servers, real estate etc.
[You can probably substitute any other cloud provider for AWS here]