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Sure, Amazon should probably screen the obvious big name authors, like Stephen King and J.K. Rowling. But other than that, it's problematic. There's no reasonable way to verify if a publisher has the right to print any given book. Here is how the majority of professional publishing contracts work (and I do not include self-publishing, although that certainly has its place in the market).
1. An author submits a book to a publisher.
2. If the publisher wants the book, they enter into a contractural agreement with the author.
3. These contracts are HIGHLY variable. In the vast majority, the author retains the copyright, but grants the publisher exclusive rights to publish and distribute the work in certain forms and media (e.g. print, electronic, audio). When the contract expires, these rights revert to the author, and it is up to the publisher to cease publication by the end of the contract (or be in breach).
It's not feasible to expect Amazon to create a gigantic database of all works under contract, who currently has the electronic rights, and the date on which those rights expire, let alone to check it with every upload. I have a medium sized publishing company, and we contract at least 4 books per week. We've been in business for 5 years. Do the math; that's a lot of books, and we're one company. Amazon has to rely on our signed statement that we are legally allowed to publish the books we offer.
How they determine a "legitimate" publisher versus a pirate is also problematic. There are plenty of small publishers who are legitimate, and plenty of pirates who pose as legitimate publishers.
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