After having seen multiple AWS outages/service disruptions, with nothing other than a green checkmark ever showing, I am now very confident that the checkmarks are hardcoded and there is no logic behind them.
It's already been confirmed by amazon employees on HN that the color can only be changed manually by an employee and it needs a high level of approval.
Also, there are incentives based on colors, so the managers really don't want to admit any failure.
While this is a personal feeling and I don't have any data (metrics) to back it up: I think a large percentage (and probably a majority) of metrics don't end up helping a company once they are created - especially if any salary or bonuses are based on them. They are always so gamed that they become worthless.
Your point hits on a true thing. One problem is that companies measure proxies for performance, not performance itself. A great book on the topic (and related topics) is Weapons of Math Destruction. Anyway, a green checkbox is pretty far into proxie-land. It's not very closely related to client retention or profitability, and now we see it's not even related to operational time of the equipment. Yikes. So a proxy like this is not even worth using as a metric; it can only cause false confidence that some information is known, and that leads to bad decisions. Not the least of which is bonusing incompetent managers.
Amazon has metrics so they can tell a story, not so they can measure things.
As a cute example, one of their senior people (in a stats heavy role) couldn't explain how they'd detect if people wanted to be able to automatically order socks and tshirts on a buying cycle outside of what I call the "scheduling horizon", eg every 3-6mos. (Things I need regularly, but sparsely enough it doesn't stand out to do proactively -- eg, I buy socks when they all have holes, not on a reasonable replacement cycle.)
You can have a high level of customer satisfaction if you lie to them and arrange so that they don't even notice, and by having a good damage control strategy for when some customers do notice they aren't getting that they were promised.
Such approach has better ROI than actually doing high quality products or services, which is why so much of what we buy is utter shit. That's especially true on the mass market, when satisfaction of individual customers doesn't impact your company at all, as long as they're not complaining too loud.
Are any incentives affected by customer complaints? Because if so, all we need to do is complain and they might actually start using the status system meaningfully. (I'm sure this is wilful thinking, though; I doubt people don't complain in this situation!)
Also, there are incentives based on colors, so the managers really don't want to admit any failure.