Brendan Gregg has written here and elsewhere about the performance of VMs on EC2. Worth reading if you're interested in figuring out how close it is (or isn't).
That is a complete non sequitur. AWS has traditionally never been the cheapest way to rent machine power, but people don't use it because it's cheap, they use it because it's easy to get started with a wide range of facilities without dedicated sysadmins.
