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2. What publishers saw, very early in the game, really, was that Amazon was aggregating customers that would soon find it difficult to get an ebook from any other source. In the parlance: their switching costs would be high. And they were the industry’s best customers.
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This part is impossible, because the Kindle will accept non-DRMed mobi (or prc) files from anywhere.
All publishers have to do is sell books without DRM. I've personally bought more books from both Fictionwise and Baen than I have from Amazon.
But instead of doing this, Fictionwise was bought out by B&N who proceeded to try to turn it into a DRMed e-book store. But funny enough, it still seems like it's the multi-format (aka non-DRM) books that sell better, even though these mostly seem to be legacy books (titles that used to be on the store before they got bought out) or self-published stuff.