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I would be interested in seeing the context of the statement in the original post. I'm pretty sure that when Amazon says it may "report the information they've collected from your Kindle 'in non-aggregate form' to law enforcement and litigants," the next phrase is "when compelled to do so by a subpoena" or something similar.
The Kindle License Agreement (US) discloses that Amazon collects information: "The Device Software will provide Amazon with data about your Device and its interaction with the Service (such as available memory, up-time, log files and signal strength) and information related to the content on your Device and your use of it (such as automatic bookmarking of the last page read and content deletions from the Device). Annotations, bookmarks, notes, highlights, or similar markings you make in your Device are backed up through the Service. Information we receive is subject to the Amazon.com Privacy Notice."
The Privacy Notice says that Amazon "We release account and other personal information when we believe release is appropriate to comply with the law..." e.g., generally meaning a subpoena (or, I guess, a national security letter or some other instrument compelling Amazon to respond).
The info Amazon identifies is perfectly legitimate for it to know -- some of it it has to know in order to provide the service. It has to know when an Amazon book is deleted from the device, so it will show up in the archive, for example. It's useful to know if some devices are restarting all the time, which indicates a software bug, etc.
As for the rest, I really, seriously doubt that absent a subpoena, Amazon is poking around our Kindles, looking for some reason to report a Kindle user to law enforcement. As someone upthread points out, logs don't give them access to the files themselves, and a file name itself could mean anything, given that we can name our files any way we want.
The publicity if they ever reported a user to the police (absent something like evidence of child pornography) would be so devastating that it would make the 1984 debacle look like a stroll in the park. Amazon may have the right to go looking through our Kindles, but they have every practical reason in the world not to do so.
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