Your question (rephrased as a statement) pretty much sums it up...:
[T]hey just say, "Great, you're running a server on our cloud, good luck with that, if it crashes your data is lost"[!]
To clarify, AWS provide unmanaged VPS. Unlike a managed VPS (which you will pay substantially more for) you manage your own server. As such you need to do (and manage) your own backups (among other things). TKL make that easy for you with TKLBAM (TurnKey Linux Backup And Migration) but if it all seems too much for you then perhaps an unmanaged VPS is not for you...
Yep that's pretty much it...
Your question (rephrased as a statement) pretty much sums it up...:
To clarify, AWS provide unmanaged VPS. Unlike a managed VPS (which you will pay substantially more for) you manage your own server. As such you need to do (and manage) your own backups (among other things). TKL make that easy for you with TKLBAM (TurnKey Linux Backup And Migration) but if it all seems too much for you then perhaps an unmanaged VPS is not for you...