Seems like a stupid design decision at that point to have a dedicated instance per user. For a pass-through they could multiplex tens of thousands of customers easily onto a single instance.
No, SMTP runs on port 25 only. You need an IP per end mailserver if you are not terminating TLS on the multiplexer.
It's not stupid.
One computer can have multiple ip addresses though. I don't know if it works on AWS or for email but I think it's at least theoretically possible.
Please read up on how email works before arriving at this conclusion.
Would they still keep their own separate static IPs then?
You can assign multiple interfaces to an EC2 instance and each of those can have a static IP. I think there is a hard cap on the amount of interfaces you can assign to a single machine, so you'd still have to scale out horizontally at some point.