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I believe that Amazon made this change to simplify the user interface. Previously you could right click on a book thumbnail and select an option to "pin" the book. That option would download a locally cached copy which could be read offline.
Now the option to pin books is gone. Instead once a book has been open for a short while it automatically downloads to local storage without the reader needing to take any action.
When selecting some books you will see a message "We're sorry. Kindle Cloud Reader cannot open this book, but you can read it with our free Kindle app." As far as I can tell that is not associated with DRM, but with formats that the Cloud Reader does not support, such as fixed layout textbooks. Unsupported books isn't anything new. If someone has a contrary example I would like to learn about it.
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