Why and when exactly should I use EC2 with S3?
I'm using EC2 to install tools like Gitlab and Rundeck. It works fine without S3 storage.
The problem is just if I terminate instances, I'll lose my files?
Short answer: Yes, you can use EC2 without S3. S3 is cloud storage and isn't used for EC2 images.
S3 is used for storing files, such as distributions, backups, and can even be used for static websites.
To answer the second part of your question: when creating storage for a new EC2 instance, uncheck the Delete on Termination, so it will be saved if you ever choose to terminate the EC2 instance.
Be careful though, I've had problems in the past where AWS will not let you reuse volumes that were used with a marketplace image.
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