For one, it responds quicker than Riak: Riak has (cold) response times of about 300ms, while this service claims single-digit ms response times.
Also setting up Riak is not exactly trivial, and using this service outsources that hassle.
I'm not hating on Amazon, it is a good move for them and they are doing some things that Riak cannot do, but cost and response is not one of them.
On the price: If you would get 3x16 GB machines with Joyent, that would cost you 1400$/month. You can get a lot of resources for that with this new AWS service.
I don't have any experience with either Joyent or this new DynamoDB, but I do have some experience with Riak, and from the docs this new service would be a very viable competitor.