I'm not sure why this is a surprise. Real 'clouds' in my opinion are all about elasticity. If you can't benefit from that then you're wasting your money and should host elsewhere.
Because most users have a relatively fixed base load, and buying reserved instances for that base load lets you save lots of money. The ideal setup would look like: reserved instances for base load, on-demand for natural daily curves, and spot instances for batch or price sensitive work.
