Not sure if it's more expensive, even if you ignore the free quota. Amazon charges you $0.10 per instance-hour, not cpu-hour like Google (so you only pay while you consume CPU). Also, you should probably compare the storage price not to S3/EBS, but to Simple DB (you still pay for CPU time spent in the datastore, though).
My problem with the pricing is not that Google hasn't indicated what the pricing will be like, but that if you need more resources there is no other option except hope that Google will be nice to you and up your quotas.
* $0.10 - $0.12 per CPU core-hour
* $0.15 - $0.18 per GB-month of storage
* $0.11 - $0.13 per GB outgoing bandwidth
* $0.09 - $0.11 per GB incoming bandwidth
http://googleappengine.blogspot.com/2008/05/announcing-open-...
It's slightly more expensive than Amazon.