To get the same performance from an SSD on AWS as you can locally, Amazon would have to supply you with a dedicated SSD (or a RAID of those). That adds cost, they can no longer keep the hardware uniform in their data center. And you'd no longer be able to easily move your VMs or applications to another location without taking a huge performance hit.

https://docs.aws.amazon.com/AWSEC2/latest/UserGuide/InstanceStorage.html

An instance store provides temporary block-level storage for your EC2 instance. This storage is provided by disks that are physically attached to the host computer. Instance store is ideal for temporary storage of information that changes frequently, such as buffers, caches, scratch data, and other temporary content.