Well they can, but do they care? I buy tons of books from fictionwise.com, and get freebies lots of legit places. I don't hesitate to upload them to my kindle via amazon servers. I also take books from amazon, strip them and reformat them (if needed) and then send them up as a personal document. I am not worried about what they might think about it. If I was, I could load them via USB cable. If you are concerned about privacy, then do that. But honestly, how do they know where you got your books? Can they tell if you got it from fictionwise, baen, or your mother? No. They can't.
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