For what it's worth, I've had luck just using the AWS EC2 web console, and choosing "Create Image" and "No reboot" from the instance's context menu. That spits out an EBS snapshot and an EBS-backed AMI based on the snapshot, which is probably what you were after. I went through the instance store image creation steps a long time ago for a project that deployed on custom AMIs and it was pretty convoluted; we ended up going EBS-backed and skipping the instance store altogether.
For what it's worth, I've had luck just using the AWS EC2 web console, and choosing "Create Image" and "No reboot" from the instance's context menu. That spits out an EBS snapshot and an EBS-backed AMI based on the snapshot, which is probably what you were after. I went through the instance store image creation steps a long time ago for a project that deployed on custom AMIs and it was pretty convoluted; we ended up going EBS-backed and skipping the instance store altogether.