I am not sure we should all assume Amazon is losing money on ebooks--the hardcover bestsellers is where this battle is currently focused, hyped, and fought but there's tremendous activity in the backlist and indie author areas. If you don't believe me, go browse the bestseller lists in your favorite category (top 100). Many of those are $1.99 or lower. I think this battle was already over it before it began.
The only thing remaining is for authors to realize they are the content deliverers, and the publishers used to be...
Scott Nicholson
http://tiny.cc/21tn9