You are using an older version of CLI that does not support --launch-template option.
$ aws ec2 --version
aws-cli/1.11.109 Python/2.6.9 Linux/4.1.17-22.30.amzn1.x86_64 botocore/1.7.20
$ aws ec2 run-instances --launch-template
aws: error: argument --image-id is required
After upgrading:
$ sudo pip install awscli --upgrade
$ aws ec2 --version aws-cli/1.14.65 Python/2.6.9 Linux/4.1.17-22.30.amzn1.x86_64 botocore/1.9.18 $
aws ec2 run-instances --launch-template
aws: error: argument --launch-template: expected one argument
$ aws ec2 run-instances help [--launch-template <value>]