During a recent AWS outage, the STS service running in us-east-1 was unavailable. Unfortunately, all of the other _regions_ - not AZs, but _regions_, rely on the STS service in us-east-1, which meant that customers which had built around Amazon’s published reliability model had services in every region impacted by an outage in one specific availability zone.
This is what kreeben was referring to - not some abstract misconception about the difference between AZs and Regions, but an actual real world incident in which a failure in one AZ had an impact in other Regions.