My experience is that the free tier is pretty useless any way. If you want to just test something, then one micro instance is fine. But if you actually want to run a basic web app? One micro instance does not work.
The weird thing is that all the other services have decent, useful free tiers that give you enough resources for your beta phase at least. Why is EC2 so low? Maybe make it 750 hours total for any set of instances?
Depends on what you mean by "basic web app". For example, the Erlang-based CMS Zotonic runs beautifully on a T1.micro, even with PostgreSQL and an Nginx proxy on the same box.
The weird thing is that all the other services have decent, useful free tiers that give you enough resources for your beta phase at least. Why is EC2 so low? Maybe make it 750 hours total for any set of instances?