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I expect Amazon to change their pricing once they've established a foothold and makes me a bit wary to adopting it. Their other offerings are simply far too expensive which you will naturally reach out for.
Would this also mean lower latency between two locations? One interesting case for me would be lowering latency in StarCraft: Brood War, which is cursed by having 90% of its player base in South Korea, with the rest of us foreigners spread all over the world.
"This is because my space game sends a lot of bandwidth. 10-20 megabits per-second per-client"

What is this game doing that uses so much bandwidth? Pretty sure most games use something like 2mbps.

There is nothing "democratizing" about hosting your game's servers on AWS.

Your game can have zero hosting cost if you just let players host their own servers. Let people play the game they paid for, forever, instead of locking them in to playing on an AWS server then killing the game in a couple of years when it's not profitable anymore.

Give me self host code any day. This feels like the bait and switch AWS likes to pull. Would rather rely on the server in my dresser drawer than AWS for as much as I possibly can.
The best thing that happened for multiplayer games is that kids came along that agreed that they didn't need developers to actually create games when all they really wanted was graphics and physics so they could be responsible both for buying the game and creating all of the "content" in it by interacting with each other.