The amazon-ec2 tag has existed for quite a while in stack overflow which I feel only invites questions that belong in server fault.
Should it really exist in Stack Overflow and if so what are some examples of legitimate questions?
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Since Amazon has an extensive API for all of it's cloud platforms (ec2 being one of them), there is a definite need to keep the amazon-ec2 tag on Stack Overflow. Any question relating to programming against those APIs is a perfect fit for being tagged as such.
Since ec2 is also a server-oriented service, it has it's own home on Server Fault dealing with the server-oriented aspects (such as managing) the ec2 servers.
There are questions on Stack Overflow that use amazon-ec2, and which are legitimate questions. Using that tag doesn't automatically mean the question should be asked on Server Fault.
The fact two different SE sites use the same tag should not confuse users, as those sites are using that tag for different aspects. For example, both Drupal Answers and Stack Overflow use views: In Drupal Answers, that tag is used for questions about the Views module, while in Stack Overflow the equivalent of that tag is drupal-views; views has a meaning that is not related with the meaning it has on Drupal Answers.
Clearly, there are questions that suit Stack Overflow, and questions that suit Server Fault. Questions that better suit Stack Overflow are questions about programming; if a question is about which web service should be enabled on Amazon EC2, then the question suits Server Fault.