Isn't VPS's public IP blocks are well known and very easy to block? I read that this is not a viable solution in case of China's firewall.

Denying the entire country the ability to ssh into ec2 instances would be pretty economically damaging, even for china

Exactly, yeah. Small VPS providers are possible to get blocked but blocking AWS regions would be devastating. So it is the perfect place to put something like this.

Blocking - yes, heavily rate limiting - already happening.