Misleading advertising is considered unfair competition in the state of California [1]. If you are advertising that it can withstand a certain amount of force, and it can't, then you are certainly owed that $200.
Well OK, but speaking as somebody who got a quick free replacement when my kindle had a problem that actually was Amazon's fault, I still think it's sort of lame. In my opinion Amazon was demonstrating that the kindle is relatively durable, which I think is true after owning one for a long time. This guy dropped a bag with a kindle and a macbook in it. Like somebody in the comments there pointed out, that's not really what was in Amazon's video. For all we know, he dropped a macbook on a kindle, got $200 and a replacement, and that's 'epic'.
I agree with you. When I read the thing, my first thought was: "oh great, we're applauding somebody who is pushing this lawsuit-happy society?".
He dropped it, too bad for him, be a big man and buy a new one. I wouldn't be surprised if his credit card company could have even swallowed the costs as part of the CC benefits.
Additionally, I feel like Amazon is "one of the good ones" in terms of customer satisfaction and customer support. Going the legal way on them is doing a disservice to everyone else.