[crabbone]

I don't think "host yourself" in this instance would've helped. I think AWS in this instance is operating at a loss. Author found a loophole in AWS pricing and that's why it's so cheap. Doing it on their own would've been more expensive.

Now as to why the AWS pricing the way it is... we may only guess, but likely to promote one service over the other.

[amluto]

AWS is surely operating at a loss for this particular case (zero S3 charge).

But there is no way that cross-AZ traffic costs AWS anywhere near what they charge for it.