So far that's the way it looks. It seems Amazon changed the way they manage collections on the Touch, removing the storing/reading of collection info from the visible filesystem probably into an internal storage mechanism. Maybe it makes it easier to maintain for them, or work with their cloud, or just to be standard with something. Its unlikely they were at all concerned about removing the ability for users to modify collections themselves.
There's always some hope they might make an update that allows it again. It seems very unlikely, but you could always email and ask them nicely
