Pricing is a big part of domains for me and AWS pricing seems a bit high to me. I'm also not sure on if whois privacy is offered or included? If it was then the domain price would be fine. I noticed a Route53 zone is included, but is it included in the price or costs additional? I had a domain with low traffic and it was $6/year just for DNS hosted zone so if it was included in the domain price I would probably move all of my domains, though whois privacy is still a big concern.
For the past few years I've been moving to Hover ($15) and then lately Badger ($10) as it is cheaper, but they both have whois privacy bundled in with the domain price as I think it is an important service. I previously worked on and maintained a domain registrar so these hit pretty close to home, but I'm still not really happy with any solution. It seems Amazon's model of getting pricing lower didn't really come through with this new offering just comparing to the current market.
Could hosted email be the next big thing AWS introduces? With as many people who are frustrated by lack of good options (Google Apps) it could be an interesting next stage for AWS (App Hosting, Domain Registrations, and Email Hosting), then I don't know what will happen to traditional hosting providers, but I think they will be trying to figure out how to stay relevant.