I'll tell you why I'd like to get there. It makes updating the master image easier. If you need a new package, you just update on the server side, and then all the new images get that new package. No rebundling required.
It also helps when you want to upgrade your OS. As long as the packages are mostly the same, you can just run your update script from the new OS and make a few changes.
The way I have to do it now, I have to build a whole new master image from scratch, because I can't upgrade Ubuntu in place on EC2 due to the way they handle the kernel and kernel modules.
Yes, it does. But you probably aren't starting instances that often, and it only adds a few minutes. If you really need a fast boot, then you can still use an image.
However keep in mind, on EC2 at least, that the images are actually downloaded from S3 when you boot, so if you have a huge image, it will take almost as much time.
It also helps when you want to upgrade your OS. As long as the packages are mostly the same, you can just run your update script from the new OS and make a few changes.
The way I have to do it now, I have to build a whole new master image from scratch, because I can't upgrade Ubuntu in place on EC2 due to the way they handle the kernel and kernel modules.