[andreyf]

Um, Amazon could point out that the decision to withdraw the book was that of the publisher, and that they are legally bound to defend the rights publishers as defined under US law.

Think of it this way - there are a couple of parties here. Both Amazon and most publishers are public corporations. That means they have a legal obligation to maximize shareholder value. The law allows publishers certain rights, and, in order to follow the law (maximize shareholder value), they must take advantage of those rights.

Amazon, in turn, has a choice of forcing the publishers give up their rights under the law. Doing so would decrease the number of publishers that sell books. I imagine they did an economic analysis and figured that to maximize shareholder value, they must protect the publishers' legal right at the expense of common understanding of "readers' rights".

So, where exactly is the problem here? Is it in people following the laws?

I would say no: the problem is with the laws themselves. Which laws is an interesting question, one that is very much lacking discussion on this forum :(