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"We started making too many calls to S3, and almost took down one of their data centers. They throttled us and it took us a while to figure out what was going on; for a while our numbers cratered as users could not connect. We had to move completely off of Amazon and host everything ourselves."

Isn't this the exact scenario that people use the "cloud" for? Scaling up massively and quickly?

Uh yeah, I was thinking exactly the same thing, isn't that entirely the point of S3 that no matter what you throw at it, it just keeps working?
I don't know if this is already common knowledge to everyone here, but this is a YC co, from the second class, which was in Cambridge.
Indeed. Some may know them better from those days as iminlikewithyou.
I play Charadium - if you're interested in this genre I suggest taking a look at it. Plus there's no IAP, which in my mind is a plus.
You must try the similar web app here http://motyar.info/draw You can convert that to iPhone app using phonegap if someone interested.