Earlier quoted context omitted.
Some alternatives to yanking the app would be to adhere to the rule but make it laborious and sufficiently buried beneath menu layers that it becomes too difficult to use versus a link that breaks out to the web browser. Or begin charging on the AppStore for the Kindle app at a price point they believe will compensate for the losses.
I didn't think of that but it's a good idea: charge $5 for the app (or whatever). People who have already bought it don't lose anything, people who do buy the app don't cost Amazon any money. Or maybe Amazon's margin is over 30% and they just won't care.
Personally my bet is on an HTML5 kindle reader webapp. Only disadvantage is that you'd need a web connection, which you don't always have on iPad and iPod touch.