Agency may have actually caused Amazon to make more money per Agency title than wholesale. It's just their contention that they sell less books at that price.
Remember that a "race to the price point that yields the most profit on the total sales of that product" is not the same thing as a "race to the bottom." It's in Amazon's best interest to NOT go below the former, too. And they're also in a better position to know where that price point is than anyone else.