This is how I've been working on my side project. Not with EC2 or Linode, but with a Chunkhost (they're running a beta of very small, 20gb disk / 512mb ram) VPS. Using my Cr48 to develop it has been a dream (minus some minor issues with Cr48's tendency to lock up ssh terms if you lose connection, requiring a reboot to get them out of your alt-tab queue).

It's pretty great - not only can I work on it from anywhere with a working ssh client, but I get super fast speeds.