I do find it odd that they encourage you to use the same account to sign into Amazon the store and AWS. That seems a bit like asking for a Subway loyalty card to buy a gun.
From the article, one problem is that even if you don't use your AWS account on the Amazon store, you could, and so XSS vulnerabilities in the store can be used to hijack AWS accounts. Unfortunately the store is large and complex and so has a large attack surface area.
Amazon offer security token authentication for accessing AWS account resources, which can limit the impact of a breach in another part of their system.
When did they start doing that? When I started using S3 to back up other people's photos I immediately created a second Amazon account for AWS. I don't remember them discouraging me from doing that.
What I meant was that if you use the email registered for amazon.com when signing up to AWS they don't create a separate account for you or suggest that you use a different e-mail to create a new account.
WS-* and XML cryptography is such a clusterfuck. It's ironic to see Amazon injured by use of "standard" constructions; they'd have been better off rolling their own here.
You shouldn't really be surprised though; especially after Yegge's rant the other week. Software quality at Amazon is pretty mediocre, and pales in comparison to Google's (I worked at both places.)
In other news, Hitler could have won and the terrorists could have successfully followed up 9/11.
I do think this story is noteworthy, not because of the headline, but because it draws attention to the underlying deficiencies of XML cryptography, as others have pointed out in comments.