Typical audio compression rates can be 10:1, especially for voice. So if the LED rings are lit for 30 seconds, is there 30 seconds of network activity, or 3 seconds? If it's 30 seconds, either Amazon is grossly wasting internet bandwidth by streaming uncompressed audio, or it is sending 10x as much data as the query it is supposed to be sending.

You do understand that it is trivial to operate the LED lights and microphone independently, right? The hardware /could/ be designed so that the microphone can't be activated without also turning on the LEDs, but I'm guessing they're independently controlled by a microcontroller, and that it's the hidden software which is responsible for turning the LEDs on when the microphone is in use.

Yes, this is a concern for smartphones as well. The capability, even if it is not currently in use, is a concern.