It definitely sounds like it sucks from the perspective of an internal AWS developer or SRE, but if the AWS systems are architected such that these internal failures aren't seen by end users then AWS's reliability reputation remains fully intact.

Customers are paying AWS so that their SREs don't get called, they don't care if the AWS SREs do as long as the system keeps running.

Based on the supporting quotes at launch from Capital One, Dow Jones and WaPo it sound like enough customers are ok with vertical write scalability and (pretty awesome) horizontal read scalability for now because it fits their use case and is better than what they had before.

Also consider that since the cluster management overhead has been removed from the customer, they can essentially "shard" by using a separate cluster for each sufficiently large service/org/dept, which might actually work out better for them in some respects.

Perfect is the enemy of good enough, the architecture might be laughable to you, but it is probably miles ahead of what the customer was using before.