O'Reilly misses the point. Amazon is NOT Microsoft. Amazon doesn't sell web server software. Amazon's strength is
1. their online shop
2. competitive pricing through market domination
While competitive pricing is probably important to most customers, the shop itself is also too important to be neglected. I love the Amazon website because it enables me to browse their shop for hours without feeling bored or distracted. I love reading the reviewers' comments; I love finding books that are related to my searches. And I love all the other features, such as reading people's personal best of lists.
As a Kindle owner I don't care if Amazon's e-books are "open" or "closed". Notice that
open doesn't necessarily mean DRM-free. ePub is open. Yet, Sony sells their ePub books with DRM. Amazon's Mobi isn't open. So? If I have the urge, I can still use one of the many tools discussed elsewhere here to convert Mobi back to HTML.
It's obvious that O'Reilly has his own motivation to promote "openess" ever since his involvement in Bookworm.