When I read through Amazon's logic, they wanted to single-handedly re-write the relationship that already exists between the author and the publisher. It is a very thinly veiled move to try and cutout the publisher.
So what? Publishers have a similar role to record companies. Somebody else creates the product, they edit the product, but mostly they are just the marketing firm. Why should they be getting a bulk of the profits? When people suggest this sort of thing with music, you hear chants of hell ya, stick it to the record companies who are getting a lot more money than they deserve for what they do. Yet when it comes to book publishers, you're saying the opposite. Times, they are a changin'. No longer must an author rely solely on a publisher to create physical copies of their books and get them into book stores. E-Books can be sold on Amazon in a similar manner to how music can be sold on iTunes, at which point publishers are just the marketers. Obviously book publishers are going to fight to keep their massive piece of the pie, just as record companies do.
Did online music purchasing destroy music? Did they destroy record companies? Hell no, record company profits are up because people purchase more music. They have had a pretty big impact on physical retailers though.
Will selling e-books at an appropriate price on Amazon (and B&N etc) destroy book publishers? Why would it be any different from the record companies? They are already having an impact on physical retailers though, and that impact will likely only increase.