Thanks for your response!
Yes, I did read the ToS and Amazon does indeed have the right to refuse service to anybody. However, nowhere in the ToS does it say Amazon refuses to allow redownload of already purchased digital content (Including Kindle, Amazon Appstore).
Having multiple accounts is not a violation of Amazon's own policy.
Amazon's "account specialist" only communicates through e-mail and do not have a direct phone line. They only respond to e-mails, but once every 24 hours. Regular Amazon Customer support is great, but these "specialists" are definitely not.