This may work in the short term as a marketing strategy, but there are a few things wrong with the idea.  The first is that dedicated readers like the Kindle will last very long at all.  Either tablets or other devices that combine computer-level power and speed with cellular ability will send dedicated readers the way of the clay tablet.  Also, the only way this would work is if all publishers only sold their books through Amazon.  Just as in video tapes and DVDs, I am fairly certain there will come a point where e-texts go through their own format battles, the winner probably being some open source type of file. 

At that point Amazon may be offering foolishly low-priced products, but why is anybody going to layout the bucks for the tool that can only read one thing when you could pick up something from Apple or Gateway that does everything and can read from any source, including Google, once they get the copywrite issues sorted concerning their scanning of books. (and even today, what is the percentage of e-text sales compared to paper?  I'm sure it's still very small.)

In addition, one of the advantages of e-texts that publishers will begin to realize is that they no longer need stores, whether brick and mortar or virtual, to drive their sales of bundled electrons.  The physical stores will still get the bound pages and more than likely the sites like Amazon will see their profit cut since they only provide a link to the publisher's page where you can buy the file.  (Could this mean instead of smaller payouts for authors larger ones?)  In fact, I am sure the publishers would be happy to provide anybody with an incentive fee that brings buyers to their site.  This would help reviewers actually make a living wage when newspapers are falling out of favor with readers.

To me it just shows the shortsitedness of Amazon's executives, not really a threat to the availabilty of books or texts.  I personally buy many more books from independent sellers than I do any of the large book outlets, and none from Amazon, even though they may have a lower price.  The consumer has the choice where to spend their dollars.  Even though Walmart is the cheapest thing going it has been years since I set foot in one, preferring my locally owned True-Value hardware store, which is truly an old fashioned hardware store the experience of shopping in which Wally world will never be able to match.

Amazon has made sure that e-books sold on Amazon can only be read on Kindles and that Kindles will not accept downloads from any bookseller other than Amazon.

But this just isn't true. E-books sold on Amazon can be read on iPhones, PCs, and soon Macs and Blackberrys and iPads. And any book in PDF or MOBI format (among others) can be read on the Kindle.

What IS true is that e-books purchased through Amazon can't (as far as I'm aware) be read on the Nook or Sony Reader or other dedicated reading machines, and that most of the DRM-enabled books sold for those machines can't be read on the Kindle.

But this actually means something quite different. It means that the proprietary players aren't moving towards interoperability, that it will be harder to switch from one dedicated reader or one preferred store to another. Still, doesn't that make a multifunction device (like the iPhone/iPad/iPod touch) more appealing?

Everything I've heard points to the opposite conclusion this author wants to draw; Amazon is happy to sell Kindles, but really wants to sell ebooks, and will take a relatively platform-agnostic stance to get there. The money (and the margins, and the proven business model) isn't in the razors, it's in the blades.