How is it a flaw!? Building datacenters in different regions come with very different costs, and different costs to run. Power doesn't cost exactly the same in different regions. Local construction services are not priced exactly the same everywhere. Insurance, staff salaries, etc, etc... it all adds up, and it's not the same costs everywhere. It only makes sense that it would cost different amounts for the services run in different regions. Not sure how you're missing these easy to realize facts of life.
No, but it does reflect the dangers of incentivizing everyone to use a single region.
Most people (myself include) only choose it because its the cheapest. If multiple regions were the same price then there'd be less impact if one goes down.
The problems with us-east-1 have been apparent for a long time, many years. Once I started using us-east-1 long ago, and seeing the problems there, I moved everything to us-west-1 and stopped having those problems. EC2 instances were completely unreliable in us-east-1 (we were running hundreds to thousands at a time), not so in us-west-1. The error rates we were seeing were awful in us-east-1.
A negligible cost difference shouldn't matter when your apps are unstable due to the region being problematic.
Incentivize the best behaviors.
Or is there a perspective I don't see?