Earlier quoted context omitted.
I can believe that if Amazon were sticking to terms for its own market, but Amazon is attempting to prohibit anyone who sells through its market from simultaneously trying other pricing strategies in other channels. That seems more like a classic attempt at using market power in one channel to coerce behavior in other channels, rather than competing on the product's actual strength (unlike Google or even Apple).
You can try other pricing strategies, it's just that you need to give Amazon the lowest list price. No different than Apple really, requiring your in-app content to match the lowest pricing available. Amazon and [to a much greater extent] Wal-Mart play these games with physical goods too. It's just you never get to read the terms and big distributors don't complain publicly.
IGDA says the Amazon terms limit you to the lowest price "available or previously available on any Similar Service" — it's the "previously available" that's the sticking point.
Tweetbot is having a $2.00 introductory sale on the iOS App Store, where the price will eventually go up. If Tapbots were foolish enough to do an Amazon version, they'd be constrained to offer that price forever. Absurd.