I guess it depends on the individual packages. While many things can comfortably be quickly built on such hardware, I'm sure it wouldn't be enough for something like Firefox or Chromium. That can be handled by temporarily using a more powerful server.
I don't know about it being better, but you've got me curious. Linode also has block storage volumes. On using something like an S3, I wonder if that's really the best option. I don't know if it's cheaper, but it seems to be less flexible. For example, I like to have my private package repo provided on a VPN, not open to the public. I don't suppose using something akin to S3 would allow for a similar setup.
I think DigitalOcean would support this better than Linode. You could keep the build host filesystem on a block storage volume instead of having to recreate it every time, and you could store the built packages in DigitalOcean's equivalent of S3 instead of needing a VPS just to host them.