Has Amazon ever bumped the specs on existing hardware types? Or do they just create new hardware types? e.g. is it possible that if you get a 3-year reservation for an h1.xlarge, by 2015 h1.xlarge might have newer specs?

I had thought that EC2 reservations were upgradeable, but a quick check on the forums shows you're right, they're not. Of course, you can play your own "tiered usage" game, like laptops in IT departments, where the old h1.xlarge becomes cheap enough to use as a second-tier machine and you go reserve the h1.xxlarge for Cassandra.