How is it a 'fallacy'? To be clear, this has nothing to do with the actual streaming (which does not happen from EC2) but instead are the basics like viewing history and categories. It absolutely is the simple part of the application, albeit, as mentioned, at a very large scale. Given that someone else mentioned it, does Netflix even bother with the whole recommendation algorithm thing anymore? My personal experience has been that it gives the most superficial of recommendations.
And if we're being honest, the Netflix app layer is kind of terrible. I could enumerate the problems, discoverability being king, but it is not the compelling part of the service.
The recommendations even contradict their own ratings. Netflix often recommends complete crap to me, and even says I'm likely to rate it one star. It even offers me things I've rated as not interesting or one star.
Meanwhile, app level features like restricting certain types of content isn't available. I want to be able to delete crap from the Netflix catalog when my kids log in.. I don't care about nudity, language, etc. but more about just how dumb some of the cartoons are.