Are you sure about that? Most of the aws provided S3 sdks include the option of client side encryption. Not to mention that there are plenty of third party options for that as well. AWS could I guess look at your s3 data, but it will just look like gibberish.
I think it’s pretty clear the person you are responding to is not suggesting AWS can magically break encryption, but rather that they “have access to your stuff” that is actually on AWS. There are plenty of AWS customers running data through, or storing data on, AWS that is sensitive in the form it is in on AWS. If you have an rdbms (database) actively running on AWS for example it is not e2e encrypted. If you are terminating a customer TLS connection on an ec2 hosted web server their web form upload is exposed to that machine. Etc etc.
