It's not necessary to use an instance-store image to build an instance-store image, see this example http://sorcery.smugmug.com/2014/01/29/instance-store-hvm-amis-for-amazon-ec2/ so there should be no restriction on the ExpectedRootDevice
Merge pull request #1453 from manul/master

builder/amazon-instance: It's possible to create instance-store images from EBS-based images