@whitearrow: You mention that the updates file is downloaded to \AppData\Local\Amazon\Kindle which would suggest that instead of placing the blocking file in Program Files (x86)\Amazon\Kindle, it should be placed in \AppData\Local\Amazon\Kindle.
Code:
@echo off
rem for standard install in AppData, use %localappdata%\Amazon\Kindle\application%
set KindleApp=Program Files (x86)\Amazon\Kindle
set KindleStorage=%localappdata%\Amazon\Kindle
if not exist "%KindleApp%\kindle.exe" goto :nokindle
if exist "%KindleStorage%\storage" if not exist "%KindleStorage%\storage\" del /Q "%KindleStorage%\storage"
if exist "%KindleStorage%\updates" rmdir /S /Q "%KindleStorage%\updates"
echo This file disables Kindle for PC downloads. > "%KindleStorage%\updates"
echo Kindle for PC downloads are now disabled
goto :exit
:nokindle
echo Cannot disable downloads - Kindle for PC is not installed at expected location
:exit
pause