The 'small' instance he's testing is the worst deal Amazon offers. If you buy certain instances you get can a better connection to EBS, and then you can allegedly buy better I/O for $. A fair analysis is going to involve pages and pages of graphs and charts...
It is hard to beat AMZN's flexibility and easy provisioning. For instance, even my sister-in-law can walk up to AWS, spin up an instance with Windows, log in with RDP and then enjoy everything you can enjoy on Windows other than high-end gaming. (For you mac-ers in the audience, this is a clean and economical way to make sure that your landing page works for "the rest of us")
But you don't have to choose because you can work with Linux. On top of that, AMZN layers services such as Elastic Map-Reduce which are compatible with industry standards but eliminate so much time you could waste sysadmining.
> If you buy certain instances you get can a better connection to EBS, and then you can allegedly buy better I/O for $
You actually buy provisioned IO. The throughput can be actually smaller in some scenarios than for non-provisioned IO, provided you: don't have neighbors or they are not noisy. And boy, is that provisioned IO expensive (we've bought quite a bit of EBS volumes).