Why?

If it was a smaller company then spreading resources out across more and more products could result in a drop in quality, but this is Amazon. They have practically unlimited resources. They can afford to put far more in to products than other companies, and they've already got a team who can build some really good stuff. If they can capture what works and use it to understand how to build their products that should result in better products rather than worse.

Scale means you can throw lots of people at something, it doesn't mean you can make it good.

Bureaucracy, internal politics, budget/cost cutting, unpleasant work environment, short-term stock price targets instead of long-term goal based targets... There are a million and one reasons why big companies start to suck.