What has always been the biggest concern about app engine? Lock-in. You're at the mercy of Google. Sure there's typhoon ae etc... but really those are not alternatives.
What does Google go ahead and do? They do exactly what their critics said they would do and what us GAE adopters hoped like hell they would never do, screw us over.
App Engine is finished not because we're all going to move off to EC2, but because people who are considering using app engine will see exactly what has gone on here with the pricing, think about the lock-in argument against GAE, and decide not to use GAE. There will be a drop off in new apps, and eventually Google is going to see GAE isn't really panning out and pull the 3 year plug.