This sounds similar to what Jungle Disk offers, but focused on pictures. The way they approach it is that they give users 5GB per month for a $2 per month fee for storage. On average, this should cover the AWS costs and leave some margin for Jungle Disks. I think any additional storage charges after that are billed at the rate of AWS or Rackspace since they are compatible with both (I believe they are owned by Rackspace). I think this approach makes it less intimidating to consumers who have no idea what AWS is.