Except Amazon's CDN and hosting resources dwarfs wordpress.com

I mean they aren't even using an amazon subdomain or their own domain - it all looks like an afterthought someone had this week "oh yeah we should have a blog, where can I set one up in a few minutes".

Their CDN and hosting resources may dwarf WordPress.com, but WordPress.com's main competency is keeping high-traffic blogs up and running nicely. There's no reason for Amazon to move into the blog hosting business, especially when you can get a custom domain and design on WP.com.