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Hi khawaja,
Thank you for sharing your feedback on this question.
I agree that the explanation for the incorrect answer is not very clear. I will revise it to properly explain the situation.
The main problem with this question is that it is a single large EC2 instance and the attached EBS volumes are not enough to store the growing data from users.
Therefore, as best practice recommended by AWS, for static content or objects that need to have durable and highly scalable we should choose Amazon S3 for storage.
You are correct that EBS volumes are persistent storage and the EC2 instances are not using Ephemeral storage. Still, using EBS volumes and Autoscaling group of EC2 instances have disadvantages.
For example, if your total storage requirement is 1TB, then all EC2 instances must have a 1TB EBS volume attached to them. The cost will increase with each EC2 instance that is provisioned by the Auto Scaling group. Also, what if the storage requirement is now 2TB, then all EC2 instances must have a bigger EBS volume again. There is no automated way to dynamically increase the EBS volumes of the EC2 instances and it is not very economical to have large EBS volumes to each EC2 instance. Also since the data is growing, it will be harder to sync the data between the EBS volumes of the Auto scaling group.
For this situation, Amazon S3 serves the purpose of storing all the data, storage is virtually unlimited, highly available (with 99.999999999% durability), and is very cheap compared to EBS volumes.
Hope this helps.
Let us know if you need further assistance. The Tutorials Dojo team is dedicated to helping you pass your AWS exam!
Regards,
Kenneth Samonte @ Tutorials Dojo