I've run AWS instances and micro's ended up costing about $50-60/month. The page above also clearly states that a micro 1yr reserved is $54/month. Don't forget that doesn't include charges for EBS, network, load balancer, ip addresses, S3, etc.
But really, you are comparing apples to oranges here. AWS != AppEngine. They are two entirely different products.
First off, when your micro instance dies in the middle of the night (and trust me, it will... I've seen it happen many times now), there isn't someone at AWS who is going to start up a new instance for you. This is something that you are going to have to make happen on your own. The closest thing AWS has to AppEngine is BeanStalk and that is *just* the Tomcat instance and it is *at a minimum* $35/month. http://aws.amazon.com/elasticbeanstalk/#pricing
Never mind all of the API services that app engine provides like http sessions, memcached, datastore, users, etc. All of this is stuff you'd have to setup (AND MANAGE) on your own on AWS. How much is your time worth? Knowing that I'll never have to do IT/sysadmin again is worth WAY more than $50/month.
Stop your bellyaching. If your app can run on appengine, it really is the best priced option out there for what you get when you sit down and really count all the beans on the table.
I'm curious what is the hardware spec of a GAE instance. I heard someone claimed it has only about 100megs RAM per instance. AWS micro is $.02/hour and reserved micro is $.013/hour vs GAE instance $.08/hour.
Also the GAE instance-hour is different from AWS instance-hour. GAE is process-instance-hour and AWS is machine-instance-hour. You got the whole machine to do other things in AWS case.