So you're saying their deal is "pay us $120/year but we make no commitment to provide anything in exchange?"
Now that’s kind of different from the PR fallout. Amazon is risking a mass walkout of their customers over this; it just depends on whether or not customers see this as a reasonable response to a crazy circumstance, or a greedy move on Amazon’s part to maintain profitability over their commitments to customers.
I was under the impression that one party cannot unilaterally modify the terms of a contract without offering consideration to the other party, and the consideration can't be "we will continue to perform according to the terms of the contract".
For a "customer obsession strategy," this one should hurt their bottom line, either with cancellation of prime subscriptions or lost sales. I am not saying amazon should be penalized or taken to court. This is just the biggest vulnerability I have seen out of the Amazon machine, and I think its very interesting.