FWIW I was informed by an AWS employee that their internal philosophy is to keep pricing at cost+ levels, which is a strategic play - it forces the operations to remain lean and discourages many competitors from trying to wedge themselves into the cost-price gap.

Fat profit margins attract competition, this is what happened when Oracle/Unix combo were chewed up by Microsoft Windows/SQL from the bottom, and then Linux/MySQL started chewing up Microsoft from their bottom. It's the dog-eats-dog world.