Actually, if prices are not increasing, then they are falling. Prices fall by the inflation rate. Let inflation rate = 3% then the price is falling 3% per year. Not major but still a decrease.
Add to that that EC2 prices actually are falling, from .10 to .085/hr for linux boxes for example, and it seems like a pretty good deal.
If you want to get the lowest pricing on EC2, use a spot instance request where your bid price >= standard pricing (i.e. 0.085/hr for m1.small). This will essentially get you a spot priced, but indefinitely persistent instance and you'll typically pay 1/2 or less than the standard pricing. I've had a spot instance running for 3 months paying about 45% off list price on average.
Can the spot price rise above the standard pricing? If so, are you able to switch to standard pricing without losing your instance(s)?
It could, but it is extremely rare. Check out http://cloudexchange.org to see historical pricing. A spot instance cannot be changed to standard pricing.