I think both Werner Vogels and the paper itself were pretty clear that this was NOT the basis for S3. This line from section 1 is pretty telling even had they not spoken up on this:

"To meet the reliability and scaling needs, Amazon has developed a number of storage technologies, of which the Amazon Simple Storage Service (also available outside of Amazon and known as Amazon S3), is probably the best known. This paper presents the design and implementation of Dynamo, another highly available and scalable distributed data store built for Amazon's platform."

More supporting evidence from section 2.1:

"Dynamo targets applications that need to store objects that are (usually less than 1 MB)."

S3 allows individual objects up to 5GB in size. This in and of itself does not rule out Dynamo being the underlying store for S3 but does certainly lend weight to what Werner and the paper's authors have claimed regarding S3's origin.