Their reasoning seemed a bit paranoid, but it wasn't that Amazon would secretly start mining their data there without telling them, it's that this retailer would invest 10's (even 100's) of millions of dollars in tools and infrastructure on AWS and then AWS would change their terms and conditions to allow them to look at/share data 'legally' and the retailer would be so in the hole in terms of investment/technology they couldn't leave/stop them without losing millions. They saw it as risk mitigation.

I think it's _incredibly_ unlikely this would ever happen, but if you combine that with "I don't want to give one of our biggest competitors a cent" it ends up with policies like this