I'd guess that writing to the RAID is still bottlenecked by the worst drive in the array. But if only one out of N blocks has to be read/written to that drive, average performance may improve (basically, the idea of 'regression towards the mean').
I don't know if that's what actually happening, but testing seems to confirm that RAID performance is more consistent than single drive performance.
RAID0 on EC2 isn't as insane as it appears at first glance. EBS's have an annual failure rate of around 0.2%, while hard drives are around 5%. So, the chances of 1 EBS drive failing is around the same as the chance of 2 physical hard drives failing (5%^2 = 0.25%). It doesn't sound unreasonable to suggest that a RAID0 of EBSs is about as reliable as a RAID10 of physical drives and more reliable than a RAID5 of physical drives.
If you take a look at our benchmarks, you'll see that with RAID you can get 100 MB/s of seq reads (or ~5MB/sec of random reads). Even on a really bad day, speeds will only fall to around a third of that.
While that's not the fastest thing in the world (e.g., a good SSD will outperform a 16 drive EBS Raid for most workloads), I don't think it's fair to characterize it as 'slow as molasses'.
Most people are probably using EBS to run a relational database, or something which will be doing random reads more likely than sequential reads. And speaking from experience, a 4 drive EBS raid couldn't even match the performance of a 4 drive RAID-10. Once we started adding SSDs, the gap widened significantly.
I don't know if that's what actually happening, but testing seems to confirm that RAID performance is more consistent than single drive performance.
RAID0 on EC2 isn't as insane as it appears at first glance. EBS's have an annual failure rate of around 0.2%, while hard drives are around 5%. So, the chances of 1 EBS drive failing is around the same as the chance of 2 physical hard drives failing (5%^2 = 0.25%). It doesn't sound unreasonable to suggest that a RAID0 of EBSs is about as reliable as a RAID10 of physical drives and more reliable than a RAID5 of physical drives.