There are some practical reasons given in this thread. An Amazon card is about as fungible as you get. For me at least, it's even better than a cash card; these days I'll just put that value into Amazon anyway.

Amazon cards are pretty popular when companies have small dollar giveaways of various sort.

More generally, in a lot of circles in the US at least, giving cash as a gift is often seen as a bit crass. So, if you really don't know what to buy a person, a gift card is seen as an at least minimally thoughtful gift that lets the recipient choose what they want. Amazon admittedly tends to fail the minimally thoughtful test but that's the story with gift cards generally.