“Amazon believes the value exchange between publishers and authors is fundamentally broken,” said Scott Jacobson, who worked on the Kindle team at Amazon and is now at the Madrona Venture Group. “In a world where authors can hire their own editors, market their books through the web and social media, and get production and distribution through Amazon or other services, publishers will play a lesser role and their share of the economics will be diminished.”
So writers should get more and publishers less, an assertion with which few writers would disagree. But Amazon also believes that books should be cheap. This makes the pie smaller for everyone; Amazon argues that the publishers will make up on volume what they lose on each sale.