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It's clear from the ToS that Amazon had every right to pull the book, and probably also clear that they had the right to go into peoples' archives and delete it there. (Probably from their Kindles, too; but I think they're justifiably scared of doing that.)
Having said that, I do think they should take the time to explain why they have removed the books (especially to customers who have lost said books from their archives). A simple statement of "this is what we've done, this is why we've done it, we apologize for the inconvenience," would be fine.
Amazon has every right to do what they want regarding what books they carry and don't carry - and readers have every right to support or not support Amazon with their wallets.
However, Amazon is approaching Apple-like levels of opacity when it comes to explaining what they're doing and why, and in the long run that's a bad thing.
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