By all means, this is not unique to Amazon - not that it makes it any better.
I did a post-grad interview for Epic (epic.com - healthcare software) in a similar fashion, that was at least as draconian.
After passing a 15 minute phone screen, they sent me a link to a service that:
* Installed their proprietary software on my Mac
* Connected me to a real person who verified my DL against who they were expecting
* Had me swing my laptop 360 degrees around the room I was taking the test in, to make sure there were no notes or people assisting me on the quiz
* Took remote control of my computer and force quit any programs in Activity Monitor that were on their 'blacklist' (including Dropbox, etc)
* Gave me what I imagine amounted to a three-hour SAT style test with English proficiency, math, logic, etc.
* The whole time, had that same person watching me through my webcam and watching my screen, to make sure that I was not cheating.
I passed, and during my in-person full-day interview in Wisconsin, they had me do a few more of these tests (that were slightly harder and more about communication skills), as well as some interviews with people in person.
It was an interesting experience for sure - definitely a different side of the coin compared to what a lot of HN is probably used to. I ended up getting an offer that was very good considering they are based outside of Madison, but ultimately decided to go somewhere else.