For one, it responds quicker than Riak: Riak has (cold) response times of about 300ms, while this service claims single-digit ms response times.
Also setting up Riak is not exactly trivial, and using this service outsources that hassle.
You can use Riak Smartmachines on Joyent's cloud that would get similar performance for an order of magnitude cheaper than what amazon is charging. If you are seeing 300ms response times, you are not using SSD's and you are not using a similar number of nodes that Amazon is charging you for.
I'm not hating on Amazon, it is a good move for them and they are doing some things that Riak cannot do, but cost and response is not one of them.
I both wouldn't bet on Joyent's Smartmachines being a magnitude cheaper and being as fast:
On the speed: We run a Riak cluster, and for us the actual response times we get from Riak are, as described, slower than what Amazon promises in its docs.
On the price: If you would get 3x16 GB machines with Joyent, that would cost you 1400$/month. You can get a lot of resources for that with this new AWS service.
I don't have any experience with either Joyent or this new DynamoDB, but I do have some experience with Riak, and from the docs this new service would be a very viable competitor.
Riak has many shortcomings, but I wouldn't describe latency or installation as primary concerns. Our cold response times have a 99% bound of 8ms, and median of 5ms on commodity SSDs. Installation is handled by apt and is trivial to automate.