[vidarh]

It's an interesting question. In my experience people often have this idea that AWS can scale infinitely, and get shocked when they are faced with the AWS limits ("but I thought we could just spin up 200 instances, what do you mean we have to ask them to increase limits?"), and I've actually had errors from the EC2 api telling us there were no instances of a given instance type available (one of the larger/more unusual instance types, in one of the smaller regions).

But their margins should be large enough, and have been for so many years, that they should have been able to take that into account and adjust expansion accordingly.

I'm more inclined to think that they have simply decided to milk it while they can. I rarely meet people who have any clue what their infrastructure choices actually cost them and what they would pay elsewhere, and I regularly have conversations about how much people believe they'd save by moving to/from provider X where it transpires that said person hasn't even tried costing it out but are certain they'll save money. I also regularly talk to IT departments that have no kind of budget or forecasting in place for their hosting requirements. The state of budgeting for server infrastructure is simply shocking. In that kind of environment, if you price based on actual cost, rather than based on whether or not people believe you're expensive, you're leaving money on the table.