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When Apple started setting the prices, they had a bit more control. iPods had been selling for 2 years at that point, and had a large chunk of the market. Jobs was able to come in and say, "Hey, millions are buying this music player, and they can only rip and pirate, so why not sell them music cheaply so they become legal?". Also, the price structure for music is still similar. 99 cents a song, ends up being around the same price for an entire album. Amazon did not have that leverage, and they have to deal with hard cover pricing, which the music industry never really had any analog to.
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