It's more of a platform to see what works and what doesn't, at the expense of small businesses who wanted to sell on Amazon. At least that's my perspective. A 3-5% margin may be fine when you run a 100B business, have economies of scale and a world-class brand, but the same will spell disaster for a small business.

There are also a lot of dishonest 3rd party sellers who come and go like a swarm of locusts. Maybe they "win" in the short run by selling counterfeit goods and not honoring Amazon policies, but in the end they will lose also when Amazon bans non-prime fulfillment of orders (that day is coming sooner rather than later, my guess is before 2020)

The majority of 3rd party sellers by volume own their own websites outside of Amazon. The ones you described are tiny mom&pop stores that come and go by the thousand every year.