Amazon's pricing argument is one instance of the same general phenomenon that gross expenditures, under some conditions, increase in response to price decreases. The effect has different names in different contexts:
With taxation, people sometimes refer to the Laffer Curve, which for levels of taxation to the right of the peak of the curve, reducing tax rates increases tax revenues.
For technology, Jevons Paradox explains why, as the efficiency of home appliances increases, so does energy consumption.
This is off-topic, but you brought up the Laffer curve and Jevons paradox, so here comes the rant.
Both make for some nice economic theory, and like much economic theory, it's mostly speculation.
The Laffer curve, for instance, is a nice "sciency" sounding name for the idea that at a 100% tax rate, there will be no tax income, since nobody will be doing any work if they have to pay all their income in taxes (thus the "optimal" tax rate must be somewhere between 0 and 100%, both excluded). Not only does the entire Laffer curve theory just state the "obvious" (it brings no insights as to what the optimal tax rate might be), but the premise is also demonstrably false, since people will actually do some work for free (but of course, volunteer work doesn't exist in mainstream economics; it's like wind resistance in introductory physics, you just ignore it).
Jevons paradox is the same; to quote the very article you linked to:
[...] Saunders dubbed the hypothesis that improvements in energy efficiency work to increase, rather than decrease, energy consumption the Khazzoom–Brookes postulate [a specific instance of the Jevons paradox]. Saunders showed that the Khazzoom–Brookes postulate was consistent with neo-classical growth theory (the mainstream economic theory of capital accumulation, technological progress and long-run economic growth) under a wide range of assumptions.
That's mainstream economic theory. Meanwhile, in the real world, using real observations, economists found that there was only a small rebound effect, and that energy efficiency improvements actually does decrease energy consumption. (But since reality conflicts with the theory, we'll just ignore reality.)
To get back on topic, I'm not saying all economic theory is bullshit (but there's lies, damn lies, and economics...), just that when people trot out economics, there's usually an agenda, and the invocation of economics is often part of an "appeal to authority" fallacy. (Like how the Laffer curve is inevitably brought up as an argument for reducing taxes, ignoring the fact that estimates of the "optimal" tax rate cluster around 70%(!), above even the highest income tax rates found anywhere in the world.)
Amazon is of course not above manipulating numbers for its own benefit; the most obvious flaw in their argument being that they (deliberately?) ignore how Amazon's price affects other sales channels.