They are talking about large scale massively parallel code to run on a super computer. Most grad students in physics that need it have have access to a system much faster then Amazon. For example my friends code runs on Cori @ NERSC which is a 622,336 core Cray.

http://www.nersc.gov/systems/cori/

I completely agree on the domain knowledge statement. It is 100% required more then the CS degree.