EC2 isn't the fastest, I'll admit. What makes EC2 a great choice for a hosting platform is that it is fairly consistent, stable, well-documented, and allows you to experiment much more rapidly than really any other option. If you go with dedicated hosting, you better hope you set everything up properly with the right balance of CPU/Memory/Disk the first time, or you've got to make expensive, painful changes to your infrastructure.
I agree for the most part, but I would not say EC2 is consistent. Maybe if you are light enough that you don't push its limits, but if you do, you see spikes. This and the fact that nodes frequently (at the scale I spin up) don't fully boot and sometimes (rarely, though) disappear.
I'm not complaining. EC2 has been incredibly valuable and I could tack on many positive adjectives - consistent just would not be one of them for me.
If it's cheap or not depends on what you compare to. Most other VPS systems are like home cooking: it's cheaper (and likely tastes better) but you have to do more work yourself. EC2 is more like McD: the price is higher but all you have to do is eat the thing / run the actual app. You can also buy just a cheese burger when you need it, you don't have to order a big meal.
