bhartman's take on this makes sense to me. I don't see why Amazon would risk competing in a market saturated with options, rather than just entering the market by proxy which is what they've been doing. However, just because I can't conceive of it, doesn't mean Amazon doesn't have something up their sleeve that we don't expect.
I don't think Amazon is just content focused, though. As I understand it, Kindle generates huge revenue from hardware sales, and was almost exclusively hardware revenue for a while. Amazon has also been dipping into the computer/AV hardware market. They make Amazon branded cables, accessories, and even some devices like a soon to be released
Amazon external DVD drive (that one kinda surprised me.) Then this cloud business...
I don't know what to expect from this company.