In my opinion, Amazon should have gone with a generic budget phone to augment their "Amazon Basics" line of dependable, economical cables, USB hubs, and so forth.
I would make it a plain, vanilla Nexus-like phone running vanilla Android with no skins and not tied to any contracts or carriers, but priced $50 less than a comparable Nexus 5 or whatever is the current Nexus. Or else, make it about $400 but throw in a year of Prime to sweeten the deal. Maybe add a couple of features to distinguish it, such as a microSD memory expansion port. Forget the lame Amazon AppStore, or at least provide both -- AppStore and Google Play, and let the customer choose.
Such a device might not sell 20 million units in the first week, but it would sell a heck of a lot better than the Fire Phone did. Heck, I would have bought one. I went with a Nexus 5 just a couple of months ago, after the very pricey Nexus 6 was announced. There's a good market for a vanilla, plain Android phone, and Prime would make it a no-brainer.
The article makes Bezos sound a bit over-controlling and zany, but at least the author hastens to add that second guessing Bezos and Amazon is a risky business. Who knows? Perhaps the Fire 2 will get it right. (I hope Jeff's reading this!)