I was thinking the exact same thing and Google led me here.

Even though it is against their TOS, how would they know you were hosting a honeypot?
I've never used Amazon EC2 before so I'm not sure how it works.
I guess they do some monitoring on the boxes traffic for malicious activity? Even if they did, with the amount of boxes they are hosting, would they have the time to take any action?
(just thinking out loud and sorry to resurrect an old thread)
Edit---
I was thinking about using something like this;
https://hub.turnkeylinux.org/Edit---
TurnkeyLinux Hub doesn't allow you to use the free 1 year micro server offered by Amazon and their registration process is ridiculous.