The missing component of your analysis is that amazon has 4th option: re-sell instances of B as instances of A when A is more expensive, and otherwise allowing the market to adjust. The analysis is strictly limited to instances where amazon could, in theory, do this (e.g., reselling c6gd as c6g).
Assuming the market is in equilibrium, the above scenarious aren't realistic, as demand at the market price would equal supply at the current price (roughly, of course).
Suppose there are 1000 c6g and 200 c6gd, with equilibrium price of $3 and $2, respectively (i.e., all instances have demand). Amazon re-SKUs c6gd as c6g until there are 1100 c6g selling fro $2.90 and 100 c6gd selling at $2.90. Total revenue is $3480 vs. $3400. Of course it's impossible to know the true numbers without hidden knowledge of the market, but this is more akin to what would occur. Amazon effectively has a risk-free arbitrage opportunity here, so it stands to reason that there is revenue to be made. Customers don't have this option (since you can't short spot instances), so the best you can do is diversify and save money.
Edit: Actually, the AWS spot market is often out of equilibrium in a way that makes this reselling even more effective. For instance, in the example in the article the c6gd instance is actually pegged at the minimum price, so some number of those instances could be resold as c6g without moving the c6gd price at all.
I think you’re think about the revenue functions for spot instances in isolation of the larger supply base of all instances. Spot instances are already a result of revenue management of a fixed supply base that increases in discrete increments over time. Instance capacity overall usually leads instance demand, shortage costs are very high in data centers.
Spot instance capacities are a function of the all instance capacity for the same type and on-demand instance usage. Spot instance pricing can influence the quantity demanded of on-demand instances of the same type, and vice-versa.
Anyhow, there’s no way we can figure out whether you’re right or wrong with any reasonable level of certainty.
While it's tough to say with certainty how much revenue is lost, there is certainly lost revenue. Consider that many substitute instances are available at the minimum allowable price (i.e., won't go any lower, there is unused capacity). These could be resold without moving the substitute market.
Assuming the market is in equilibrium, the above scenarious aren't realistic, as demand at the market price would equal supply at the current price (roughly, of course).
Suppose there are 1000 c6g and 200 c6gd, with equilibrium price of $3 and $2, respectively (i.e., all instances have demand). Amazon re-SKUs c6gd as c6g until there are 1100 c6g selling fro $2.90 and 100 c6gd selling at $2.90. Total revenue is $3480 vs. $3400. Of course it's impossible to know the true numbers without hidden knowledge of the market, but this is more akin to what would occur. Amazon effectively has a risk-free arbitrage opportunity here, so it stands to reason that there is revenue to be made. Customers don't have this option (since you can't short spot instances), so the best you can do is diversify and save money.
Edit: Actually, the AWS spot market is often out of equilibrium in a way that makes this reselling even more effective. For instance, in the example in the article the c6gd instance is actually pegged at the minimum price, so some number of those instances could be resold as c6g without moving the c6gd price at all.