Yep, the Amazon cloud can fail. And, by the way, in case you didn't notice, planes can crash, nuclear plants can have accidents and, in general, there's no way to have 100% security or it's simply just too expensive.
Does it mean that you'll never take another flight or that we have to stop all the nuclear plants? No it only means that you need to understand the reality of life: shit happens!
The royal family never flight all together in the same flight, it's their way to manage the risk of flying. You need to decide how you are going to manage the risk of cloud adoption, as any other thing that you do.
And managing risk is one of those things that they pay us for, isn't it? So go, manage your risk in the new environment as you were doing in the previous one. And don't think that cloud was a fad or that is going to disappear. It's here to stay as a much more effective model than previous ones for a lot of business cases.
You can see the same point well articulated in this article. Just read the SLA and understand what you're signing for. It's interesting to see that Amazon didn't fail to comply with the SLA at all along the crisis. Likely the customers will ask to see those other services that are not exactly EC2, but that are becoming critical, in the SLA in the future. So it’s a good learning for everybody.
Have you heard those voices saying: we already beware you about cloud computing! We were right, now that Amazon is down you see it. I cannot believe how somebody that pretend to be intelligent can do such a simplistic analysis.
And Amazon cloud will fail again, I bet for it. And SalesForce.com, and Azure and all the others either have failed before or will fail in the future. Again and again. Shit happens.