Amazon doesn't break S3 out in their financial reports, but estimates are that they made half a Billion dollars in revenue in 2010, and certainly more than that in 2011.
That was a question to parent. _Of course_ S3 costs money. That's why it's not reasonable to compare it to a service like Megaupload, where you only needed to pay if you wanted to store over 200GB total, or have individual files larger than 2GB.