Check out these curves: https://www.stayclassyinternet.com/articles/investigating-AW...

Amazon competes with other cloud providers and with build-your-own continually, and use price segmentation to stay on the right side of the equation for as many people as possible, while still skimming as much premium for themselves from each user group. Historically, that’s meant big price drops in most categories that would make most one off investments obsolete - while still keeping a ton for themselves.

It also helps that S3 is an anchor product that helps them sell higher margin stuff.