AGPL doesn't really prevent Amazon from making it an AWS offering unless they want to modify the program and don't want to share the modifications.
It doesn't in an indirect way. A friend that worked for Amazon about 5 years ago told me they were even allowed to look at AGPL codebases on the clock because the lawyers were so afraid of it.
Another reason is that copyleft licenses are kryptonite in large organizations.
Why would I want to stop them making it available as a network service except as a way of circumventing the copyleft by effectively distributing it without actually distributing it (which AIUI the AGPL fixes)? If you want to place restrictions on how people are allowed to use the software then A) I don't see the relevance of AWS as a special case, and B) go ahead but don't imply the "open source crowd" are being unreasonable by not considering it open source.