That may make sense if the inverse of percentage of people that actually go to the trouble of returning a bulky item multiplied by the margin is higher than the shipping cost of a new item.

It's pretty easy. I've done this with hard drives that I had already installed.

Just printed the return label for the higher priced item, and slapped it on the box and gave it right back to the carrier when he delivered the same, lower priced item.

Yes, but it doesn't matter if you do it, it matters if most people do it. His argument (which I believe) is that notably fewer people will do it if they have to return the item and get a new one.

When those are the only two options presented to them, a lot of people won't be arsed to return the item, which will save Amazon $150.

I once bought a book from them and while it was in shipping, the price dropped due to a sale. I called and asked if they would reduce the price on my book and they said no but they said I could order it again at the new price and and then mail back the previous book once it reaches me.

There is a startup called Paribus that was doing automated claims for Amazon price drops. Amazon locked down the policy after a while.

There's actually several companies offering this service, Earny is another one.