Most of your discussions are missing the big picture, I think. Amazon is a private company and can sell what they want - as a consumer, I have options to procure my erotic incest fiction elsewhere, or just boycott Amazon altogether.
*However*, what should be particularly disturbing is that Amazon removed ALREADY-PAID-FOR content from peoples' archives, and refused to provide refunds! How is that in the least excusable? Where is the defense of consumer rights? How is that not outright theft? Amazon should be summarily brought to court. As one previous poster noted, this type of behavior, and the de facto government protections enabling it (via DMCA and DRM), in practice means you don't own any of the DRMed stuff. It's being leased, without even any lease terms - they can just take it whenever they want. And they wonder why people want to crack their DRM b.s....